I 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Capital Access for 

5 Small Businesses Harmonization Act’’ or the ‘‘CASH 

6 Act’’. 


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1 SEC. 2. DISCLOSURES FOR SMALL BUSINESSES THAT 

2 ENTER INTO FACTORING FACILITY AGREE3 MENTS. 

4 (a) IN GENERAL.—Prior to entering into a factoring 

5 facility agreement with a small business concern, the pro6 vider for such agreement shall provide to such small busi7 ness concern a written disclosure of the terms of factoring 

8 transactions under such agreement if— 

9 (1) the aggregate dollar amount of factoring 

10 transactions authorized under such agreement, in11 cluding any fees and other charges, is less than 

12 $500,000; or 

13 (2) if such agreement does not specify the ag14 gregate dollar amount of factoring transactions au15 thorized under such agreement, the such provider 

16 and the small business concern reasonably believe 

17 that the aggregate dollar amount of factoring trans18 actions under such agreement, including any fees 

19 and other charges, will be less than $500,000. 

20 (b) DISCLOSURE CONTENTS.—Each disclosure re21 quired under subsection (a) with respect to a factoring fa22 cility agreement shall include the following: 

23 (1) The amount or percentage, as applicable, of 

24 the difference between the face value of a claim for 

25 payment sold in a factoring transaction and the 

26 amount the provider will pay to small business conVerDate Sep 11 2014 00:03 Sep 25, 2024 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H9632.IH H9632

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1 cern for such claim under such factoring facility 

2 agreement. 

3 (2) A list of any fees that may be charged 

4 under such factoring facility agreement. 

5 (3) The amount and terms of any reserve under 

6 such factoring facility agreement. 

7 (4) The duration of such factoring facility 

8 agreement. 

9 (5) An example of a factoring transaction under 

10 such factoring facility agreement for a claim for pay11 ment sold in a factoring transaction with a face 

12 value of $10,000 that demonstrates— 

13 (A) the amount or percentage described in 

14 paragraph (1); 

15 (B) any fees that apply with respect to fac16 toring transactions under such factoring facility 

17 agreement; 

18 (C) the maximum amount of the reserve 

19 for such factoring transactions under such fac20 toring facility agreement; and 

21 (D) the net amount the provider pays to 

22 the small business concern for such claim in 

23 such factoring transaction. 

24 (c) RULE OF CONSTRUCTION.—Nothing in this sec25 tion shall be construed to require a provider to provide 


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1 to a small business concern the disclosure required under 

2 subsection (a) with respect to the modification of a fac3 toring facility agreement. 

4 SEC. 3. FEDERAL PREEMPTION. 

5 No State or political subdivision of a State may im6 pose a requirement that is in addition to, or inconsistent 

7 with, the requirements of this Act with respect to requir8 ing providers to make disclosures to small business con9 cerns regarding the terms of factoring transactions under 

10 a factoring facility agreement. 

11 SEC. 4. DEFINITIONS. 

12 In this Act: 

13 (1) FACTORING TRANSACTION.—The term ‘‘fac14 toring transaction’’ means an agreement for the sale 

15 of accounts receivable of a small business concern 

16 for goods the small business concern has supplied, or 

17 services the small business concern has rendered, 

18 but for which payment has not yet been made and 

19 for which the primary source of repayment to the 

20 provider is payment by the account debtor on the ac21 count receivable being purchased, except that such 

22 term does not include sales-based financing. 

23 (2) FACTORING FACILITY AGREEMENT.—The 

24 term ‘‘factoring facility agreement’’ means an agree25 ment between a provider and another entity that esVerDate Sep 11 2014 00:03 Sep 25, 2024 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H9632.IH H9632

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1 tablishes the terms of factoring transactions between 

2 such provider and another entity. 

3 (3) PROVIDER.—The term ‘‘provider’’ means an 

4 individual or entity that— 

5 (A) is a purchaser in a factoring trans6 action; and 

7 (B) is engaged in interstate commerce. 

8 (4) RESERVE.—The term ‘‘reserve’’ means the 

9 portion of any payment under a factoring trans10 action that the provider may withhold from the 

11 small business concern with respect to claims for 

12 payment sold under such factoring transaction, or 

13 any portion of such claims, until such claims, or the 

14 portion thereof, are paid. 

15 (5) SALES-BASED FINANCING.—The term 

16 ‘‘sales-based financing’’ means a financing trans17 action that is repaid by the business over time— 

18 (A) as a percentage of sales or revenue, in 

19 which the payment amount may increase or de20 crease according to the volume of sales made or 

21 revenue received by the business; or 

22 (B) according to a fixed payment mecha23 nism that provides for a reconciliation process 

24 that adjusts the payment to an amount that is 

25 a percentage of sales or revenue. 


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1 (6) SMALL BUSINESS CONCERN.—The term 

2 ‘‘small business concern’’ has the meaning given 

3 such term under section 3 of the Small Business Act 

4 (15 U.S.C. 632). 

Æ 


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