Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a)
For the purpose of determining whether the amount of a commercial financing
offer is equal to or less than $500,000, a provider shall:
(1) For an open-end credit plan, use the
approved credit limit.
(2) For an
asset-based lending transaction:
(A) Use the
approved credit limit if transaction meets all of the following requirements:
(i) The provider offers the recipient an
agreement that describes the general terms and conditions of the commercial
financing transaction that will occur under the agreement;
(ii) The approved credit limit exceeds
$500,000; and
(iii) The parties to
the asset-based lending transaction agree in writing that an amount exceeding
$500,000 is reasonably expected to be advanced to the recipient and outstanding
at some point during the agreement and such agreement is made in writing before
the execution of the financing agreement, before any amendment to an agreement
entered into before the effective date of these regulations, or before any
amendment increasing the approved credit limit for a consummated financing
agreement to an amount exceeding $500,000.
(B) If the asset-based lending transaction
does not meet all of the requirements listed in subdivision (a)(2)(A) above,
the commercial financing offer shall be considered less than or equal to
$500,000.
(3) For a
factoring transaction,
(A) Use the approved
advance limit if the transaction meets all of the following requirements:
(i) The provider offers the recipient an
agreement that describes the general terms and conditions of the commercial
financing transaction that will occur under the agreement;
(ii) The approved advance limit exceeds
$500,000; and
(iii) The parties to
the factoring transaction agree in writing that an amount exceeding $500,000 is
reasonably expected to be advanced to the recipient and outstanding for legally
enforceable claims that have not yet been paid at some point during the
agreement and such agreement is made in writing before the execution of the
financing agreement, before any amendment to an agreement entered into before
the effective date of these regulations, or before any amendment increasing the
approved advance limit for a consummated agreement to an amount exceeding
$500,000.
(B) If the
factoring transaction does not meet all of the requirements listed in
subdivision (a)(3)(A) above, the commercial financing offer shall be considered
less than or equal to $500,000.
(4) In all other transactions, use the amount
financed.
1. New section
filed 6-9-2022; operative 12-9-2022 pursuant to Government Code section
11343.4(b)(2)
(Register 2022, No. 23). Transmission deadline specified in Government Code
section
11346.4(b)
extended 60 calendar days pursuant to Executive Order N-40-20 and an additional
60 calendar days pursuant to Executive Order N-71-20. Filing deadline specified
in Government Code section
11349.3(a)
extended 60 calendar days pursuant to Executive Order N-40-20 and an additional
60 calendar days pursuant to Executive Order N-71-20.
Note: Authority cited: Sections
321 and
22804,
Financial Code. Reference: Sections
22800 and
22804,
Financial Code.
