Senate Bill 539 - Small Business Truth in Financing

• Enacts the Small Business Truth in Financing Act to establish disclosure requirements for commercial financing providers in North Carolina, including sales-based, closed-end, open-end financing, and factoring transactions.

• Requires providers to disclose total financing amount, finance charge, annual percentage rate (APR), repayment terms, payment amounts, prepayment conditions, and other fees in a standardized format prescribed by the Commissioner of Banks.

• Exempts financial institutions, farm lenders, motor vehicle dealers, persons making five or fewer transactions annually, and equipment dealers presenting offers on behalf of exempt entities; also exempts transactions over $500,000 and those secured by real property.

• Mandates provider registration with the Commissioner, with a nonrefundable $1,000 fee renewable every five years, and subjects providers to penalties up to $2,000 per violation ($10,000 for willful violations).

• Takes effect May 1, 2023, for all transactions occurring on or after that date.