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Johny Fernandez: This month, New York Governor Andrew

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Cuomo signed bill SB 5470B. The new bill has left small

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business finance companies with questions and it could

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complicate how the industry works.

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Senator George Borrello: This bill calls to demand the

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use of a question that in the disclosures, again, we're

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talking about disclosures of fees, which is an

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important thing, demand that they use the term double

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dipping in that question. I've looked and I cannot find

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any financial disclosure document anywhere in the

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United States where the term double dipping is used.

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Johny Fernandez: The bill was originally introduced in

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May 2019 and resurface in March of 2020. The bill

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passed in July. It was rushed through the committee

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process to be made available just in time for a floor

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vote before the legislative session closed for the

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year. Here's the breakdown. The new law gives the

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state's Department of Financial Services enforcement

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authority over non bank providers of capital, such as

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factors, merchant cash advance funders, and lines of

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credit providers. According to the bill, the Department

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of Financial Services will require APR disclosures on

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contracts, even where one can't be mathematically

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calculated. The solution they offer to work around that

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is to simply estimate what one could be. The bill

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states fines can be levied for any company found to be

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in violation, even if the violation was unwillful. The

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larger question which the bill doesn't directly address

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is whether or not it is intended to apply only to

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merchants in New York or to any capital provided that

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operates in this state regardless of who they're

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funding. The law leaves a lot of loose ends open. The

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law is scheduled to go into effect on January 2022.