South Carolina S 347: Commercial Financing Disclosure

Bill Text

2025-2026 Bill 347 Text of Previous Version (Feb. 13, 2025) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 347

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE 
"COMMERCIAL FINANCING DISCLOSURE ACT" BY ADDING CHAPTER 81 TO TITLE 39 SO AS TO 
PROVIDE DEFINITIONS, TO PROVIDE TO WHICH COMMERCIAL FINANCING TRANSACTIONS THE 
PROVISIONS APPLY, TO PROVIDE FOR WRITTEN DISCLOSURES, TO PROVIDE FOR 
PROHIBITIONS, AND TO PROVIDE FOR ENFORCEMENT.

Be it enacted by the 
General Assembly of the State of South Carolina:

SECTION 1. This act may be cited as the "Commercial Financing Disclosure Act."

SECTION 2. Title 39 of the S.C. Code is amended by adding:

CHAPTER 81

Commercial Financing Disclosure

 Section 
39-81-10. As used in this chapter:

 (1) 
"Accounts receivable purchase transaction" means a transaction in which a 
business forwards or sells to a person all or a portion of the business's cash 
receipts, accounts, or payment intangibles at a discount to the expected value 
of the cash receipts, accounts, or payment intangibles. As used in this item, 
the terms "accounts" and "payment intangibles" have the same meanings as 
provided in Section 36-9-102. The provider's characterization of an accounts 
receivable purchase transaction as a purchase is conclusive that the accounts 
receivable purchase transaction is not a loan or a transaction for the use, 
forbearance, or detention of money.

 (2) 
"Advance fee" means any consideration that is assessed or collected by a broker 
before the closing of a commercial financing transaction.

 (3) 
"Broker" means a person who, for compensation or the expectation of 
compensation, arranges a commercial financing transaction or an offer between a 
third party and a business in this State which would, if executed, be binding 
upon that third party. The term excludes a provider and any individual or 
entity whose compensation is not based or dependent upon the terms of the 
specific commercial financing transaction obtained or offered.

 (4) 
"Business" means an individual or a group of individuals, a sole 
proprietorship, a corporation, a limited liability company, a trust, an estate, 
a cooperative, an association, or a limited or general partnership engaged in a 
business activity.

 (5) 
"Commercial financing facility" means a provider's plan for purchasing multiple 
accounts receivable from the recipient over a period of time pursuant to an 
agreement that sets forth the terms and conditions governing the use of the 
facility.

 (6) 
"Commercial financing transaction" means a commercial loan, an accounts 
receivable purchase transaction, or a commercial open-end credit plan to the 
extent the transaction is also a business purpose transaction. As used in this 
item, the term "business purpose transaction" means a transaction the proceeds 
of which are provided to a business or are intended to be used to carry on a 
business and not to be used for personal, family, or household purposes. For 
purposes of determining whether a transaction is a business purpose 
transaction, the provider may rely on any written statement of intended purpose 
signed by the business. The statement may be a separate statement or may be 
contained in an application, agreement, or other document signed by the business 
or the business owner.

 (7) 
"Commercial loan" means a loan to a business, whether secured or unsecured.

 (8) 
"Commercial open-end credit plan" means commercial financing extended by any 
provider under a plan in which:

 (a) 
the provider reasonably contemplates repeat transactions; and

 (b) 
the amount of financing that may be extended to the business during the term of 
the plan, up to any limit set by the provider, is generally made available to 
the extent that any outstanding balance is repaid.

 (9) 
"Depository institution" means a state or national bank, bank holding company, 
trust company, savings and loan association, savings and loan association 
holding company, credit union, or wholly owned subsidiary thereof.

 (10) 
"Provider" means a person who consummates more than five commercial financing 
transactions with a business located in this State in any calendar year. The 
term also includes a person who enters into a written agreement with a 
depository institution to arrange a commercial financing transaction between 
the depository institution and a business via an online lending platform 
administered by the person. The fact that a provider extends a specific offer 
for a commercial financing transaction on behalf of a depository institution 
may not be construed to mean that the provider engaged in lending or financing 
or originated that loan or financing.

 Section 
39-81-20. This chapter applies to any commercial financing 
transaction consu