SB 1466

Bill Subjects

Small Business Commercial Financing Transactions Monitoring Fees

Abstract

Existing law, the California Financing Law, generally regulates commercial loans made by licensees. Existing law prohibits a covered entity, as defined, from charging specified fees in connection with a commercial financing transaction with a small business or small business owner. In this regard, existing law prohibits a fee for monitoring the small business's collateral unless the underlying commercial financing transaction is delinquent for more than 60 days. Existing law entitles a recipient to specified relief if a covered entity violates these provisions. This bill would, additionally, allow a covered entity to charge a monitoring fee to compensate the covered entity for services it provides to the small business with respect to the ongoing evaluation, tracking, and review of the small business's collateral, as specified.