Important: California Commercial Financing Disclosure Updates

On September 30, 2018, Governor Brown signed SB 1235. The bill requires a “provider” – a person who extends a specific offer of “commercial financing” to a recipient – to give the recipient certain disclosures at the time the provider extends the offer.

A recipient must sign the disclosures before the provider may finalize the transaction.

The goal of the new disclosures is to provide recipients more information about the actual costs and terms of financing agreements, as well as help them comparison shop for financing.

The new disclosures will include:

  1. The total amount of funds provided;
  2. The total dollar cost of financing;
  3. The term or estimated term;
  4. The method, frequency, and amount of payments;
  5. A description of prepayment policies; and,
  6. Until January 1, 2024, the total cost of the financing expressed as an annualized rate.

Read more from the Department of Financial Protection & Innovation.


Please contact our ACHWorks and VCI support at or 916-638-8811 Opt. 2.