American Banker, April 12, 2022, States take different paths on small-business loan disclosures
Small businesses in Virginia and Utah will soon get clearer disclosures about the money they borrow from merchant advance companies.
But the disclosures will be lacking one number: the annual percentage rate they will pay for each loan. That won’t be the case in New York and California, where lawmakers are requiring nonbank business lenders to disclose APRs.
The divergent paths in the states — and future fights in more statehouses — are the result of opposing lobbying efforts by lenders and a debate over whether APRs make sense for some types of business loans.
