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Greater Transparency in Small Business Loans: Mandatory Cost Disclosure.

This Act extends consumer protection rules to small businesses seeking financing up to $2.5 million. It mandates clear and prominent disclosure of all financing costs, including the Annual Percentage Rate (APR), fees, and repayment terms. This allows small business owners to easily compare credit offers and avoid hidden charges, increasing the financial security of their operations.
Key points
All businesses seeking financing up to $2.5 million must receive clear information on the total cost of the loan (APR) and associated fees, making it easier to compare offers.
Requirement to disclose the cost or savings associated with paying off the loan early (prepayment), protecting against unexpected penalties.
Prohibition on charging additional fees during the refinancing of existing debt unless the small business receives a tangible benefit.
Introduction of uniform definitions and calculation methods for costs across various financing types, such as factoring and sales-based financing.
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Expired
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Additional Information
Print number: 118_S_2021
Sponsor: Sen. Menendez, Robert [D-NJ]
Process start date: 2023-06-15
Lustra uses Artificial Intelligence. Verify details in source documents.
Summarized by: gemini-2.5-flash-preview-09-2025
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Small Business Financing Disclosure Act of 2023

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 118_S_2021.

Which chamber initiated this legislation?

This legislation was initiated in the Senate.

When did the legislative process begin?

The process officially started on 2023-06-15.

What are the main provisions?

Key points include:

  • All businesses seeking financing up to $2.5 million must receive clear information on the total cost of the loan (APR) and associated fees, making it easier to compare offers.
  • Requirement to disclose the cost or savings associated with paying off the loan early (prepayment), protecting against unexpected penalties.
  • Prohibition on charging additional fees during the refinancing of existing debt unless the small business receives a tangible benefit.
  • Introduction of uniform definitions and calculation methods for costs across various financing types, such as factoring and sales-based financing.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Sen. Menendez, Robert [D-NJ].

What is the latest detailed status?

The latest detailed status is: Introduced in Senate

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-26.

CATEGORIES

Economy Courts and Law