7 Disclosure Duties Georgia Law Places on Funders in Practice

A disclosure violation in Georgia produces penalties, not cancellations. The distinction decides the strategy, because the file supports a complaint to the Attorney General rather than a defense that the agreement is void.

Senate Bill 90 added commercial financing disclosures to the Fair Business Practices Act, and the enrolled text rewards close reading over summaries. Counsel ensures the enrolled text, not the summary, controls the advice. What follows names seven duties the statute places on funders and brokers, with the remedy each duty actually carries.

Transactions Covered and Transactions Excluded

Before consummation, before the first debit, the provider must deliver the disclosure in full. Coverage reaches business purpose transactions extended as commercial loans, open end plans, or accounts receivable purchases at a discount to expected value, where the provider consummates more than five such transactions in the state during any calendar year. The provider may rely on a signed written statement of business purpose, so collect and preserve the executed purpose statement.

The coverage line is, if we are being precise, a set of exclusions wrapped around a definition. Banks and their affiliates, real estate secured transactions, leases, purchase money obligations, transactions above $500,000.00, and the motor vehicle dealer loans the drafters chose to leave where they found them. The duties reach transactions consummated on or after January 1, 2024, and the agreement date on the signature page decides the question.

Funds Provided Against Funds Disbursed

Two figures open every compliant disclosure, and the distance between them is the first thing counsel measures. The statute requires the total amount of funds provided alongside the total disbursed to the business where disbursement runs lower through fees deducted at funding, amounts applied to satisfy a prior balance, or sums paid to third parties on behalf of the business. A renewal can be structured in order to present old money as new funds, with the headline figure intact and the operating account receiving the remainder, which is why the disbursement figure gets reconciled to bank records rather than to the broker description.

There is a particular quiet in an office at eight in the morning when the funding statement is the first paper of the day. Simply compare the three destinations of every dollar before signing. Whether the codified sections have moved since enrollment is a question counsel answers from the current code, not from this article.

Total Repayment and the Dollar Cost

You sign for one number and you repay another. The statute requires the total amount to be paid to the provider and defines the total dollar cost as the difference between that figure and the funds provided, without ever using the market label for the ratio. The arithmetic is extremely simple and extremely easy to misread, because the eye settles on the cost while the obligation lives in the total.

After a modification, after a forbearance, after any change the parties negotiate later, no new disclosure is required. The single disclosure rule cuts in both directions, and it fixes the cost picture as of the day of consummation. Resist the urge to treat the disclosure as a second contract, since the agreement it describes remains the only promise a court will enforce, which the statute states in plain terms further below.

Payment Schedule and Variable Methodology

The payment term is where the disclosure either works or fails. The statute requires the manner, frequency, and amount of each payment, or where payments may vary, the manner, frequency, and estimated amount of the initial payment. The agreement itself must then describe the methodology for calculating any variable amount and the circumstances that may cause it to vary, which moves the argument from the disclosure page into the contract.

A payment that can vary without a stated method is an estimate wearing the clothes of a term.

A variable schedule without a methodology reads like a train timetable that lists the stations but skips the order: informative, decorative, and useless at the platform. The agreement must state how the payment varies rather than asserting that it does. Seldom does a file arrive with the methodology attached, and its absence is the precise defect the statute anticipated.

Prepayment Costs and the Paragraph Cite

The statute requires a statement of whether costs or discounts attend prepayment, with a reference to the agreement paragraph that creates each one. Renewals, early payoffs, and discount windows live or die on that citation, because a discount without a paragraph is a promise without an address.

The paragraph number matters more than the discount.

Broker Fees and Broker Candor

Brokers work under a separate set of prohibitions. No advance fee may be assessed, collected, or solicited for broker services, with a narrow exception for actual application services such as a credit check or an appraisal of security, paid by check or money order to a party independent of the broker. False or misleading representations, material omissions, and acts operating as fraud or deception in the offer or sale of broker services are barred without regard to reliance, and false or deceptive representation in business dealings is barred outright.

The exception for application services gets more use than the rule it qualifies, as a rule. Any assurance from the broker, even casually given, should be measured against the written disclosure rather than against memory. What the provider discloses, or withholds, decides the shape of any later regulatory file.

What a Violation Produces

The violation is real. The statute leaves the agreement standing regardless. The Attorney General may receive and act on complaints, pursue voluntary compliance, and commence administrative or judicial proceedings, with civil penalties of $500.00 per violation capped at $20,000.00 for violations arising from the same transaction documentation, rising to $1,000.00 per violation capped at $50,000.00 after written notice of a prior violation. The statute creates no private right of action, and it states that a violation shall not affect the enforceability of any underlying agreement. The characterization of an accounts receivable purchase as a purchase stands conclusive for purposes of Title 7, which closes one argument while the disclosure duties open another.

I have yet to see a disclosure violation alone carry a settlement, though violations keep getting cited as if they could. Delancey Street offers a free confidential initial review of MCA files with Georgia disclosure questions as a settlement company, while independent counsel handles legal work and ensures complaints, defenses, and negotiations rest on the enrolled text. The gap between headline funds and cash in hand can look outlandish until the deductions are itemized, and itemizing it is where the file begins.