In recent years, several U.S. states have enacted commercial financing disclosure laws requiring greater transparency in equipment financing and leasing transactions. These laws affect various financing structures, including Equipment Finance Agreements (EFA), $1 buyout leases, $101 buyout leases, fair market value (FMV) leases, and 10% purchase upon termination (PUT) agreements.
For equipment dealers and vendors in the agriculture and construction sectors, understanding these regulations is essential to ensuring compliance and maintaining a competitive edge. Golden Sun Funding is committed to supporting its partners with compliant, transparent, and efficient financing solutions that align with state-specific disclosure requirements.
This white paper outlines the states with active disclosure laws, the implications for dealers and vendors, and a strategic marketing approach to leverage these regulations as a business advantage.
Effective Date: December 9, 2022
Requirement: Lenders must disclose key loan terms, including APR, total repayment amount, and finance charges for commercial financing offers of $500,000 or less.
Effective Date: August 1, 2023
Requirement: Applies to financing transactions up to $2.5 million, requiring disclosure of loan terms, repayment amounts, and other key financial details.
Effective Date: January 1, 2023
Requirement: Mandates disclosures for commercial financing amounts of $1 million or less.
Effective Date: July 1, 2022
Requirement: Focused on sales-based financing, requiring clear communication of repayment terms.
Effective Date: January 1, 2024
Requirement: Requires disclosure for transactions of $500,000 or less, ensuring borrowers have clear visibility into financial obligations.
Effective Date: January 1, 2024
Requirement: Mandates transparency in commercial financing agreements below $500,000.
Effective Date: July 1, 2024
Requirement: Requires commercial lenders to disclose loan terms to ensure transparency in business transactions.
Effective Date: July 1, 2024
Requirement: Similar to Connecticut, Kansas mandates commercial financing disclosures to protect small business borrowers.
As commercial financing disclosure laws become more widespread, equipment dealers and vendors must align with knowledgeable, compliant financing partners. Golden Sun Funding is committed to providing transparent, state-compliant financing solutions that empower dealers and business owners alike.
For more information or to discuss partnership opportunities, contact Golden Sun Funding today.