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SB 754

Commercial Financing - Small Business Truth in Lending Act

2025 Regular Session Introduced by Ben Kramer

Maryland requires commercial lenders to disclose small business loan terms transparently, protecting entrepreneurs from predatory practices and hidden fees.

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Bill Summary · SB 754

Legislative bill overview

SB 754 extends Maryland's truth-in-lending requirements to commercial financing agreements for small businesses, requiring lenders to disclose key financial terms clearly and transparently. The bill applies to loans typically used by small businesses and aims to prevent predatory lending practices in the commercial lending market. It establishes clearer disclosure standards that parallel consumer lending protections but tailored to commercial transactions.

Why is this important

Small businesses often lack the financial sophistication of larger corporations and have historically faced less regulatory oversight than consumer borrowers, making them vulnerable to opaque lending terms and hidden fees. By requiring standardized disclosures, the bill aims to level the playing field and help small business owners make informed borrowing decisions. This could reduce unexpected costs and improve access to fairly-priced capital for Maryland's small business sector.

Potential points of contention

  • Lender compliance costs: Financial institutions may argue that new disclosure requirements increase administrative burden and could reduce their willingness to lend to small businesses, particularly startups or marginally-qualified borrowers
  • Defining "small business": The specific threshold for which businesses qualify under the law may either be too narrow (excluding struggling enterprises that need protection) or too broad (capturing sophisticated commercial entities that don't need consumer-style protections)
  • Market competitiveness: Lenders operating in Maryland may face disadvantages compared to out-of-state competitors, potentially pushing small businesses to borrow from less-regulated sources or interstate lenders

Compiled from official sources — confirm details with the bill’s official record.

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