Utah Passes Commercial Funding Disclosure Requirement | Sheppard Mullin Richter & Hampton LLP

On March 24, Utah Governor Spencer Cox signed SB 183 in legislation making Utah the third state in the nation to enact a Truth in Lending-style commercial finance disclosure law. Utah joins California and New York in adopting these legal trade finance disclosure requirements. Unlike similar laws in California and New York, however, Utah’s Commercial Finance Registration and Disclosure Act (the Act) does not include an “APR” disclosure requirement and requires lenders commercial lenders to register as commercial loan providers with the National Multi-State Licensing System. and Utah Registry and Department of Financial Institutions (DFI). The law comes into force on January 1, 2023.


The Act applies to transactions for commercial purposes of $1 million or less that qualify as commercial loans, open-ended commercial credit plans or accounts receivable purchase transactions, the latter being defined to achieve typical cash advances or factoring transactions. The Act does not apply to a transaction of at least $50,000 when the beneficiary of the financing is a motor vehicle dealer. Deposit-taking institutions, licensed money transfer companies, commercial equipment lessors and purchase lenders, among others, are also exempt.


Commercial lenders will be required to disclose the following:

  • The total amount of financing granted to the company
  • The total amount of financing paid to the company, if it is less than the total amount of financing
  • The total amount the business must pay to the commercial lender
  • The total dollar cost of the trade finance transaction, to be calculated by subtracting the total finance provided from the total amount payable to the lender
  • The manner, frequency and amount of each payment, or whether payment amounts may vary, the manner and frequency of payments and an estimate of the amount of the first payment
  • A statement of whether there are any costs or discounts associated with prepaying the commercial loan, including a reference to the section of the agreement that creates those costs or discounts.
  • Any part of the financing that the supplier pays to a broker.
  • A description of the methodology that will be used to calculate any variable payment amount and the circumstances that may cause the payment amount to vary.


Although the statute does not create a private right of action, each violation of the statute’s disclosure requirements is subject to a civil penalty of $500, up to $20,000 for all violations resulting from use of the same transaction disclosures. Higher monetary penalties apply to a person who continues to violate after receiving notice of a prior violation.

Put into practice : Commercial lenders will likely need to prepare for additional disclosure laws being considered in several other states, including Connecticut, Maryland, Mississippi, Missouri, New Jersey, North Carolina and Virginia. However, for now, commercial lenders impacted by the laws in New York, California and Utah should be prepared to potentially implement three separate disclosure processes.

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