Commercial financing: disclosures.

Senator Grayson's commercial financing disclosure legislation mandates the exclusive use of "annual percentage rate" or "APR" when describing financing costs to California businesses, replacing broader terms like "interest" or "rate" in commercial lending materials.

The bill requires commercial financing providers to state the APR alongside any charge, pricing metric, or financing amount presented during the application process after extending a specific offer. Providers must calculate these rates according to existing regulatory standards under Section 940 of Title 10 of the California Code of Regulations. The legislation also establishes that providers face no liability if actual APRs differ from estimated APRs when the initial disclosure complied with regulatory guidance.

Under the new framework, violations involving transactions covered by the California Financing Law will be treated as violations of that statute, while infractions related to other commercial financing transactions will fall under the California Consumer Financial Protection Law as unfair, deceptive, or abusive practices. This dual enforcement structure maintains oversight across different types of commercial financing arrangements while aligning penalties with the nature of the violation.