119-hr3244

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3244 Introduced in House

    (IH) ]

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119th CONGRESS
 1st Session
 H. R. 3244

 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

 May 7, 2025

 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) such agreement does not specify the aggregate dollar 
 amount of factoring transactions authorized under such 
 agreement, 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. For purposes of this Act, the 
 parties' characterization of a transaction as a purchase and 
 sale of accounts receivable shall be conclusive that the 
 transaction is a true sale and considered a factoring 
 transaction. The term factoring transaction excludes a loan or 
 an advance of money to a small business that is to be repaid by 
 the small business from the proceeds of future accounts 
 receivable which are not in existence when the loan or advance 
 is made.

    (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) 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).
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