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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9632 Introduced in House (IH)]

<DOC>

118th CONGRESS
  2d Session
                                H. R. 9632

   To require certain entities to clearly disclose to small business 
 concerns key information about factoring facility agreements prior to 
  entering such agreements with such concerns, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 17, 2024

  Mr. Lucas introduced the following bill; which was referred to the 
                      Committee on Small Business

_______________________________________________________________________

                                 A BILL

 
   To require certain entities to clearly disclose to small business 
 concerns key information about factoring facility agreements prior to 
  entering such agreements with such concerns, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Capital Access for Small Businesses 
Harmonization Act'' or the ``CASH Act''.

SEC. 2. DISCLOSURES FOR SMALL BUSINESSES THAT ENTER INTO FACTORING 
              FACILITY AGREEMENTS.

    (a) In General.--Prior to entering into a factoring facility 
agreement with a small business concern, the provider for such 
agreement shall provide to such small business concern a written 
disclosure of the terms of factoring transactions under such agreement 
if--
            (1) the aggregate dollar amount of factoring transactions 
        authorized under such agreement, including any fees and other 
        charges, is less than $500,000; or
            (2) if such agreement does not specify the aggregate dollar 
        amount of factoring transactions authorized under such 
        agreement, the such provider and the small business concern 
        reasonably believe that the aggregate dollar amount of 
        factoring transactions under such agreement, including any fees 
        and other charges, will be less than $500,000.
    (b) Disclosure Contents.--Each disclosure required under subsection 
(a) with respect to a factoring facility agreement shall include the 
following:
            (1) The amount or percentage, as applicable, of the 
        difference between the face value of a claim for payment sold 
        in a factoring transaction and the amount the provider will pay 
        to small business concern for such claim under such factoring 
        facility agreement.
            (2) A list of any fees that may be charged under such 
        factoring facility agreement.
            (3) The amount and terms of any reserve under such 
        factoring facility agreement.
            (4) The duration of such factoring facility agreement.
            (5) An example of a factoring transaction under such 
        factoring facility agreement for a claim for payment sold in a 
        factoring transaction with a face value of $10,000 that 
        demonstrates--
                    (A) the amount or percentage described in paragraph 
                (1);
                    (B) any fees that apply with respect to factoring 
                transactions under such factoring facility agreement;
                    (C) the maximum amount of the reserve for such 
                factoring transactions under such factoring facility 
                agreement; and
                    (D) the net amount the provider pays to the small 
                business concern for such claim in such factoring 
                transaction.
    (c) Rule of Construction.--Nothing in this section shall be 
construed to require a provider to provide to a small business concern 
the disclosure required under subsection (a) with respect to the 
modification of a factoring facility agreement.

SEC. 3. FEDERAL PREEMPTION.

    No State or political subdivision of a State may impose a 
requirement that is in addition to, or inconsistent with, the 
requirements of this Act with respect to requiring providers to make 
disclosures to small business concerns regarding the terms of factoring 
transactions under a factoring facility agreement.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Factoring transaction.--The term ``factoring 
        transaction'' means an agreement for the sale of accounts 
        receivable of a small business concern for goods the small 
        business concern has supplied, or services the small business 
        concern has rendered, but for which payment has not yet been 
        made and for which the primary source of repayment to the 
        provider is payment by the account debtor on the account 
        receivable being purchased, except that such term does not 
        include sales-based financing.
            (2) Factoring facility agreement.--The term ``factoring 
        facility agreement'' means an agreement between a provider and 
        another entity that establishes the terms of factoring 
        transactions between such provider and another entity.
            (3) Provider.--The term ``provider'' means an individual or 
        entity that--
                    (A) is a purchaser in a factoring transaction; and
                    (B) is engaged in interstate commerce.
            (4) Reserve.--The term ``reserve'' means the portion of any 
        payment under a factoring transaction that the provider may 
        withhold from the small business concern with respect to claims 
        for payment sold under such factoring transaction, or any 
        portion of such claims, until such claims, or the portion 
        thereof, are paid.
            (5) Sales-based financing.--The term ``sales-based 
        financing'' means a financing transaction that is repaid by the 
        business over time--
                    (A) as a percentage of sales or revenue, in which 
                the payment amount may increase or decrease according 
                to the volume of sales made or revenue received by the 
                business; or
                    (B) according to a fixed payment mechanism that 
                provides for a reconciliation process that adjusts the 
                payment to an amount that is a percentage of sales or 
                revenue.
            (6) Small business concern.--The term ``small business 
        concern'' has the meaning given such term under section 3 of 
        the Small Business Act (15 U.S.C. 632).
                                 <all>
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