Commercial financing transactions: fees.

Existing law prohibits a covered entity, as defined, from charging certain fees in connection with a commercial financing transaction with a small business or small business owner, including a fee for monitoring the small business' collateral, unless the underlying commercial financing transaction is delinquent for more than 60 days. This bill would additionally provide that the above-described prohibition does not apply if the commercial financing transaction is an asset-based loan or factoring, and the fee is intended to compensate the covered entity for actions taken to validate the collateral with the intended purpose of maximizing the amount of financing provided to the small business or small business owner under the financing contract pursuant to which the fee is charged or if the fee is expressed as a dollar amount or a percentage of an identifiable base, and the fee is deemed a finance charge, as specified.