§3137.10. Revenue-based financing transaction

            A.(1) For the purposes of this Chapter, "revenue-based financing transaction" means an agreement under which a person engaged in a commercial enterprise sells or agrees to forward a percentage of sales, revenue, or income, and the person's payment obligation increases and decreases according to the volume of sales made or revenue or income received.

            (2) For the purposes of this Chapter, a "revenue-based financing transaction" is not a transaction for the use, forbearance, or detention of money.

            B. Amounts charged in a revenue-based financing transaction, whether in the nature of a fee, discount, or otherwise, are not interest.

            C.(1) A revenue-based financing transaction shall include a written disclosure of the terms of the revenue-based financing transaction as provided in Paragraph (2) of this Subsection. The disclosure shall be provided at or before consummation of the transaction. Only one disclosure shall be provided for each revenue-based financing transaction, and a disclosure shall not be required as a result of a modification, forbearance, or change to a consummated revenue-based financing transaction.

            (2) A revenue-based financing transaction shall provide a written disclosure of the following information:

            (a) The total amount of funds provided to the commercial enterprise under the terms of the agreement.

            (b) The total amount of funds disbursed to the commercial enterprise if less than the amount specified in Subparagraph (a) of this Paragraph as a result of any fees deducted or withheld at disbursement, any amount paid to the provider to satisfy a prior balance, and any amount paid to a third party on behalf of the commercial enterprise.

            (c) The total amount to be paid to the provider under the terms of the agreement.

            (d) The total dollar cost under the terms of the agreement, calculated by finding the difference between the amount specified in Subparagraph (a) of this Paragraph and the amount specified in Subparagraph (c) of this Paragraph.

            (e) The manner, frequency, and amount of each payment, or if the amount of the payments vary, the manner and frequency of the payments, the estimated amount of the initial payment, a description of the methodology for calculating any variable payment, and the circumstances under which payments may vary.

            (f) Whether there are any costs or discounts associated with prepayment, including a reference to the provision in the transaction that creates the contractual rights of the parties related to prepayment.

            Acts 2025, No. 198, §1.