N.Y. FIS Law § 801 — New York Code / Act FIS / Article 8 / Section 801
Definitions
Status: in_force

§ 801. Definitions. For the purposes of this article:\n  (a) "Factoring transaction" means an accounts receivable purchase\ntransaction that includes an agreement to purchase, transfer, or sell a\nlegally enforceable claim for payment held by a recipient for goods the\nrecipient has supplied or services the recipient has rendered that have\nbeen ordered but for which payment has not yet been made.\n  (b) "Commercial financing" means open-end financing, closed-end\nfinancing, sales-based financing, factoring transaction, or other form\nof financing, the proceeds of which the recipient does not intend to use\nprimarily for personal, family or household purposes. For purposes of\ndetermining whether a financing is a commercial financing, the provider\nmay rely on any statement of intended purposes by the recipient. The\nstatement may be a separate statement signed by the recipient; may be\ncontained in the financing application, financing agreement, or other\ndocument signed or consented to by the recipient; or may be provided\norally by the recipient so long as it is documented in the recipient's\napplication file by the provider. Electronic signatures and consents are\nvalid for purposes of the foregoing sentence. The provider shall not be\nrequired to ascertain that the proceeds of a commercial financing are\nused in accordance with the recipient's statement of intended purposes.\n  (c) "Open-end financing" means an agreement for one or more extensions\nof open-end credit, secured or unsecured, the proceeds of which the\nrecipient does not intend to use primarily for personal, family or\nhousehold purposes. "Open-end financing" includes credit extended by a\nprovider under a plan in which: (i) the provider reasonably contemplates\nrepeated transactions; (ii) the provider may impose a finance charge\nfrom time to time on an outstanding unpaid balance; and (iii) the amount\nof credit that may be extended to the recipient during the term of the\nplan (up to any limit set by the provider) is generally made available\nto the extent that any outstanding balance is repaid.\n  (d) "Closed-end financing" means a closed-end extension of credit,\nsecured or unsecured, including equipment financing that does not meet\nthe definition of a lease under section 2-A-103 of the uniform\ncommercial code, the proceeds of which the recipient does not intend to\nuse primarily for personal, family or household purposes. "Closed-end\nfinancing" includes financing with an established principal amount and\nduration.\n  (e) "Finance charge" means the cost of financing as a dollar amount.\nIt includes any charge payable directly or indirectly by the recipient\nand imposed directly or indirectly by the provider as an incident to or\na condition of the extension of financing. It includes all charges that\nwould be included under 12 C.F.R. part 1026.4 as if the transaction were\nsubject to 12 C.F.R. part 1026.4. In addition, the finance charge shall\ninclude any charges as determined by the superintendent. For the\npurposes of an open-end financing, the finance charge shall assume the\nmaximum amount of credit available to the recipient, in each case, is\ndrawn and held for the duration of the term or draw period. For the\npurposes of a factoring transaction, the finance charge includes the\ndiscount taken on the face value of the accounts receivable.\n  (f) "Financial institution" means any of the following: (i) a bank,\ntrust company, or industrial loan company doing business under the\nauthority of, or in accordance with, a license, certificate or charter\nissued by the United States, this state or any other state, district,\nterritory, or commonwealth of the United States that is authorized to\ntransact business in this state; (ii) a federally chartered savings and\nloan association, federal savings bank or federal credit union that is\nauthorized to transact business in this state; or (iii) a savings and\nloan association, savings bank or credit union organized under the laws\nof this or any other state that is authorized to transact business in\nthis state.\n  (g) "Person" means an individual, corporation, partnership, limited\nliability company, joint venture, association, joint stock company,\ntrust or unincorporated organization including, but not limited to, a\nsole proprietorship.\n  (h) "Provider" means a person who extends a specific offer of\ncommercial financing to a recipient. Unless otherwise exempt, "provider"\nalso includes a person who solicits and presents specific offers of\ncommercial financing on behalf of a third party. For the avoidance of\ndoubt, the extension of a specific offer or provision of disclosures for\na commercial financing, in and of itself, shall not be construed to mean\nthat a provider is originating, making, funding or providing commercial\nfinancing.\n  (i) "Recipient" means a person who applies for commercial financing\nand is made a specific offer of commercial financing by a provider. A\nrecipient may also be an authorized representative of such person. A\nperson acting as a broker cannot be a recipient.\n  (j) "Sales-based financing" means a transaction that is repaid by the\nrecipient to the provider, over time, as a percentage of sales or\nrevenue, in which the payment amount may increase or decrease according\nto the volume of sales made or revenue received by the recipient.\nSales-based financing also includes a true-up mechanism where the\nfinancing is repaid as a fixed payment but provides for a reconciliation\nprocess that adjusts the payment to an amount that is a percentage of\nsales or revenue.\n  (k) "Specific offer" means the specific terms of commercial financing,\nincluding price or amount, that is quoted to a recipient, based on\ninformation obtained from, or about the recipient, which, if accepted by\na recipient, shall be binding on the provider, as applicable, subject to\nany specific requirements stated in such terms.\n