NY Fin Serv L § 801 (2021)
2021 New York Laws FIS - Financial Services Law Article 8 - Commercial Financing 801 - Definitions.

* § 801. Definitions. For the purposes of this article:  (a)  "Factoring  transaction"  means  an  accounts receivable purchase transaction that includes an agreement to purchase, transfer, or sell  a legally  enforceable claim for payment held by a recipient for goods the recipient has supplied or services the recipient has rendered that  have been ordered but for which payment has not yet been made.  (b)   "Commercial  financing"  means  open-end  financing,  closed-end financing, sales-based financing, factoring transaction, or  other  form of financing, the proceeds of which the recipient does not intend to use primarily  for  personal,  family or household purposes. For purposes of determining whether a financing is a commercial financing, the  provider may  rely  on  any  statement of intended purposes by the recipient. The statement may be a separate statement signed by the  recipient;  may  be contained  in  the  financing application, financing agreement, or other document signed or consented to by the recipient;  or  may  be  provided orally  by  the recipient so long as it is documented in the recipient's application file by the provider. Electronic signatures and consents are valid for purposes of the foregoing sentence. The provider shall not  be required  to  ascertain  that the proceeds of a commercial financing are used in accordance with the recipient's statement of intended purposes.  (c) "Open-end financing" means an agreement for one or more extensions of open-end credit, secured or unsecured,  the  proceeds  of  which  the recipient  does  not  intend  to  use  primarily for personal, family or household purposes. "Open-end financing" includes credit extended  by  a provider under a plan in which: (i) the provider reasonably contemplates repeated  transactions;  (ii)  the  provider may impose a finance charge from time to time on an outstanding unpaid balance; and (iii) the amount of credit that may be extended to the recipient during the term  of  the plan  (up  to any limit set by the provider) is generally made available to the extent that any outstanding balance is repaid.  (d) "Closed-end financing" means a  closed-end  extension  of  credit, secured  or  unsecured, including equipment financing that does not meet the  definition  of  a  lease  under  section  2-A-103  of  the  uniform commercial  code, the proceeds of which the recipient does not intend to use primarily for personal, family or  household  purposes.  "Closed-end financing"  includes  financing with an established principal amount and duration.  (e) "Finance charge" means the cost of financing as a  dollar  amount. It  includes  any charge payable directly or indirectly by the recipient and imposed directly or indirectly by the provider as an incident to  or a  condition of the extension of financing. It includes all charges that would be included under 12 C.F.R. part 1026.4 as if the transaction were subject to 12 C.F.R. part 1026.4. In addition, the finance charge  shall include  any  charges  as  determined  by  the  superintendent.  For the purposes of an open-end financing, the finance charge shall  assume  the maximum  amount  of  credit available to the recipient, in each case, is drawn and held for the duration of the term  or  draw  period.  For  the purposes  of  a  factoring  transaction, the finance charge includes the discount taken on the face value of the accounts receivable.  (f) "Financial institution" means any of the following:  (i)  a  bank, trust  company,  or  industrial  loan  company  doing business under the authority of, or in accordance with, a license, certificate  or  charter issued  by  the  United States, this state or any other state, district, territory, or commonwealth of the United States that  is  authorized  to transact  business in this state; (ii) a federally chartered savings and loan association, federal savings bank or federal credit union  that  is authorized  to  transact  business in this state; or (iii) a savings and loan association, savings bank or credit union organized under the  laws  of  this  or  any other state that is authorized to transact business in this state.  (g)  "Person"  means  an individual, corporation, partnership, limited liability company, joint  venture,  association,  joint  stock  company, trust  or  unincorporated  organization including, but not limited to, a sole proprietorship.  (h) "Provider"  means  a  person  who  extends  a  specific  offer  of commercial financing to a recipient. Unless otherwise exempt, "provider" also  includes  a  person  who  solicits and presents specific offers of commercial financing on behalf of a third party. For  the  avoidance  of doubt, the extension of a specific offer or provision of disclosures for a commercial financing, in and of itself, shall not be construed to mean that  a provider is originating, making, funding or providing commercial financing.  (i) "Recipient" means a person who applies  for  commercial  financing and  is  made  a specific offer of commercial financing by a provider. A recipient may also be an authorized representative  of  such  person.  A person acting as a broker cannot be a recipient.  (j)  "Sales-based financing" means a transaction that is repaid by the recipient to the provider, over  time,  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  recipient. Sales-based  financing  also  includes  a  true-up  mechanism  where the financing is repaid as a fixed payment but provides for a reconciliation process that adjusts the payment to an amount that is  a  percentage  of sales or revenue.  (k) "Specific offer" means the specific terms of commercial financing, including  price  or  amount,  that  is  quoted to a recipient, based on information obtained from, or about the recipient, which, if accepted by a recipient, shall be binding on the provider, as applicable, subject to any specific requirements stated in such terms.   * NB Effective January 1, 2022