In a significant policy shift, the state of California has officially joined the struggle against exorbitant fees in commercial transactions involving small businesses. This development follows Gov. Gavin Newsom’s recent signing of Senate Bill 666 into law on October 13, strengthening the state’s Financing Law.
Senate Bill 666 makes it illegal for a covered entity to levy certain charges relating to a commercial financing agreement with a small business. This clause enhances the measures in place to protect small enterprises and ensure fair transaction costs.
The law describes a small business as an independently managed and operated enterprise, with its main office situated within the state of California. Further clarifications include the stipulation that the officers must be domiciled in California, and collectively, the business and its affiliates must employ 100 or fewer individuals. The average affiliations of the defined business fall under the purview of the latest amendment.
The passage of S.B. 666 showcases California’s commitment to improving the commercial landscape for small businesses within the state. This legislation is anticipated to generate a more balanced and fair environment for small enterprises, curbing excessive costs linked to commercial financing.