Commercial Financing Disclosure
S0347 creates the “Commercial Financing Disclosure Act” and adds a new Chapter 81 to Title 39 of the South Carolina Code. The bill is aimed at business-purpose financing and requires certain providers of commercial loans, accounts receivable purchase transactions, and commercial open-end credit plans to give borrowers written disclosures at or before closing. Those disclosures must spell out the amount funded, any amount actually disbursed after fees or payoffs, the total amount owed, the total dollar cost, the payment schedule or variable-payment methodology, and any prepayment costs or discounts. For commercial financing facilities, the bill allows a model/example-based disclosure instead of a disclosure for each receivable purchase.
The bill also regulates brokers by prohibiting advance fees before closing and barring false, misleading, or deceptive statements in connection with broker services. It defines key terms such as provider, broker, business, commercial loan, and commercial financing facility, and it limits the law’s reach to providers that consummate more than five covered transactions in a year with South Carolina businesses. The act applies only to transactions consummated after December 31, 2025, and takes effect January 1, 2026.
The bill would add a new disclosure and anti-fraud framework for certain small- and mid-sized commercial financing transactions in South Carolina, while leaving the underlying financing contracts enforceable even if disclosure rules are violated. It would apply to providers and brokers in the commercial finance market, but excludes several categories, including federally insured depository institutions and affiliates, Farm Credit lenders, real-estate-secured transactions, leases, purchase-money obligations, certain motor vehicle and vehicle rental financing, money transmitters, providers with five or fewer transactions per year, and transactions over $500,000. Enforcement authority is placed exclusively with the Attorney General, who may seek compliance and impose civil fines, and the statute expressly creates no private right of action.
No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or formal support/opposition in the available materials. Based on the bill text, the measure appears to be framed as a consumer-style transparency and anti-deception bill for business financing, suggesting a generally regulatory but not punitive approach. The inclusion of exemptions for banks, larger transactions, and certain industry-specific financing indicates an effort to target a narrower segment of the market rather than broadly regulate all commercial credit.
The main likely points of contention are the scope of the disclosure requirements, the broker restrictions, and the carve-outs. Providers and brokers may object to compliance costs, the need to standardize disclosures for products with variable payments, and the prohibition on advance fees. Financial institutions and industry groups may also focus on whether the law reaches online lending platforms and nonbank financing models while exempting banks and certain other lenders. On the other hand, supporters would likely emphasize transparency for small businesses and the need to curb misleading broker practices and hidden financing costs.