N.Y. Comp. Codes R. & Regs. tit. 23 § 600.19

Current through Register Vol. 46, No. 36, September 4, 2024

Section 600.19 - Thresholds for disclosure

For the purpose of determining whether the amount of a commercial financing offer is equal to or less than $2,500,000, a provider shall comply with the requirements of this section.

(a) For open-end financing, use the approved credit limit.

(b) For asset-based lending transactions:

(1) use the approved credit limit if the transaction meets all of the following requirements:

(i) the provider offers the recipient an agreement that describes the general terms and conditions of the commercial financing transaction that will occur under the agreement;

(ii) the approved credit limit exceeds $2,500,000; and

(iii) the parties to the asset-based lending transaction agree in writing that an amount exceeding $2,500,000 is reasonably expected to be advanced to the recipient and outstanding at some point during the agreement, and such agreement is made in writing before the execution of the financing agreement, before any amendment to an agreement entered into before the effective date of the CFDL, or before any amendment increasing the approved credit limit for a consummated financing agreement to an amount exceeding $2,500,000; and

(2) if the asset-based lending transaction does not meet all of the requirements listed in subdivision (b)(1) of this section, then the commercial financing offer shall be considered less than or equal to $2,500,000.

(c) For a factoring transaction,

(1) use the approved advance limit if the transaction meets all of the following requirements:

(i) the provider offers the recipient an agreement that describes the general terms and conditions of the commercial financing transaction that will occur under the agreement;

(ii) the approved advance limit exceeds $2,500,000; and

(iii) the parties to the factoring transaction agree in writing that at some point during the agreement, an amount exceeding $2,500,000 is reasonably expected to be advanced to the recipient and outstanding for legally enforceable claims that have not yet been paid at some point during the agreement and such agreement is made in writing before the execution of the financing agreement, before any amendment to an agreement enter into before the effective date of this Part, or before any amendment increasing the approved credit limit for a consummated financing agreement to an amount exceeding $2,500,000; and

(2) if the factoring transaction does not meet all of the requirements listed in subdivision (c)(1) of this section, then the commercial financing offer shall be considered less than or equal to $2,500,000.

(d) In all other transactions, use the amount financed.

N.Y. Comp. Codes R. & Regs. Tit. 23 § 600.19

Adopted New York State Register February 1, 2023/Volume XLV, Issue 05, eff. 2/1/2023