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SB 2677

Relating to disclosures for certain commercial sales-based financing transactions and the registration of commercial sales-based financing brokers; authorizing a fee and providing a civil penalty.

89th Legislature (2025) Introduced by Charles Perry

Texas bill requiring commercial financing brokers to register, disclose terms clearly, and face penalties for violations to protect small business borrowers.

Co-author authorized
#banking #texasdepartmentof(v8741) #business&commerce--general(i0050) #civilremedies&liabilities(i0065) #financecommissionoftexas(v0133) #financial--general(i0365) #mortgagebrokers&bankers(s0098)
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Bill Summary · SB 2677

Legislative bill overview

SB 2677 establishes disclosure requirements and registration standards for commercial sales-based financing (SSBF) brokers in Texas. The bill authorizes the state to collect registration fees from brokers and creates civil penalties for non-compliance with the new regulatory framework.

Why is this important

Sales-based financing is a growing alternative lending product where businesses repay loans through a percentage of future revenue rather than fixed payments. Without clear disclosure and broker registration requirements, small business borrowers lack transparency about costs and may be vulnerable to predatory lending practices. This regulation aims to protect Texas businesses while allowing the SSBF industry to operate with baseline consumer protections.

Potential points of contention

  • Regulatory burden vs. innovation: Registration requirements and compliance costs could increase lending expenses, potentially making SSBF less accessible to smaller businesses that most need alternative financing
  • Disclosure standardization: Defining what constitutes adequate disclosure for complex revenue-based repayment structures is difficult—too vague and borrowers remain unprotected, too strict and lenders may exit the market
  • Fee structure fairness: The bill authorizes fees without specifying amounts; unclear whether fees will be reasonable or become a hidden cost passed to borrowers seeking financing

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

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