This bill requires companies that buy invoices from small businesses (a practice called factoring) to clearly explain the deal terms in writing before the small business signs on, but only for agreements under $500,000. The written disclosure must spell out key details: the discount applied to the invoice value, all fees involved, any money the company holds in reserve, how long the agreement lasts, and a worked example showing how much the small business would actually receive for a $10,000 invoice. The bill applies to factoring providers engaged in interstate commerce and preempts state laws that would add additional disclosure requirements beyond what this federal bill mandates. No specific funding or implementation timeline is included in the legislation.
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