We are a few weeks away from the California Commercial Financing Disclosure (SB 1235) compliance date - December 9, 2022. Hopefully, you are ready!
In the past few months, Tamarack team members have been having conversations with companies who did not fully recognize the impact new regulations will have on their business. Even if you don’t do business in California, consider joining the discussion as many states including New York, New Jersey, Connecticut and Utah are also working through similar legislation.
In October, Tamarack partnered with Solifi to answer questions about the new disclosure requirements and how to prepare. For those who may be stuck and looking for additional information, this edition of Trail Mix offers a number of links and resources that you may find helpful.
Understanding California SB 1235 Commercial Financing Disclosure Regulation
The regulation specifies that non-bank entities funding commercial transactions in California for $500,000 or less must disclose financing terms, including APR. Beginning December 9, 2022, state law requires a signed disclosure statement before sending contract documents to the customer.
Additionally, the Monitor recently ran an updated and detailed guide to the new regulations, written by Andrew K. Alper of Frandzel Robins Bloom & Csato. Read the article here
Operational Resources
As you prepare for the operational impact of this change, consider reviewing these helpful resources compiled by the following industry organizations: American Association of Commercial Finance Brokers (AACFB), Equipment Leasing & Finance Association (ELFA) and National Equipment Finance Association (NEFA).
Starter Template Example for CA Disclosure
To help make an informed decision, the California Department of Financial Protection and Innovation requires you provide information on a number of financing attributes. In this starter template, we outline the categories for information and the requirement.
As always, if you’d like to discuss the operational impact of federal or state legislation with me, please drop me a note at dnelson@tamarack.ai!