Utah Code 7-27-202. Disclosures for commercial financing transactions
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(1) Before consummating a commercial financing transaction, a provider shall disclose the terms of the commercial financing transaction in accordance with this section and rules made by the commissioner.
Terms Used In Utah Code 7-27-202
- Business: means a private enterprise carried on for the purpose of gain or economic profit. See Utah Code 7-27-101
- Commercial financing transaction: means a business purpose transaction:(5)(a) under which a person extends a business a commercial loan or a commercial open-end credit plan; or(5)(b) that is an accounts receivable purchase transaction. See Utah Code 7-27-101
- Commissioner: means the Commissioner of Financial Institutions. See Utah Code 7-1-103
- Provider: includes a person who, under a written agreement with a depository institution, offers one or more commercial financing products provided by the depository institution via an online platform that the person administers. See Utah Code 7-27-101
(2) A provider shall disclose the following information in connection with each commercial financing transaction:(2)(a) the total amount of funds provided to the business under the terms of the commercial financing transaction;(2)(b) the total amount of funds disbursed to the business under the terms of the commercial financing transaction, if less than the amount described in Subsection (2)(a);(2)(c) the total amount to be paid to the provider under the terms of the commercial financing transaction;(2)(d) the total dollar cost of the commercial financing transaction, calculated by finding the difference between:(2)(d)(i) the amount described in Subsection (2)(a); and(2)(d)(ii) the amount described in Subsection (2)(c);(2)(e)(2)(e)(i) the manner, frequency, and amount of each payment; or(2)(e)(ii) if the amount of each payment may vary, the manner, frequency, and estimated amount of the initial payment; and(2)(f) a statement of whether there are any costs or discounts associated with prepayment under the commercial financing transaction, including a reference to the paragraph in the commercial financing transaction agreement that creates each cost or discount.(3) The commercial financing transaction agreement shall include a description of the methodology for calculating any variable payment amount and the circumstances that may cause a payment amount to vary.(4) The provisions of this section apply to a commercial financing transaction consummated on or after January 1, 2023.