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§ 930. Estimates - Sales-Based financing - Historical Method.

10 CA ADC § 930Barclays Official California Code of RegulationsEffective: December 9, 2022

Barclays California Code of Regulations
Title 10. Investment
Chapter 3. Commissioner of Financial Protection and Innovation (Refs & Annos)
Subchapter 3. Commercial Financing Disclosures.
Effective: December 9, 2022
10 CCR § 930
§ 930. Estimates - Sales-Based financing - Historical Method.
(a) This section shall apply only to sales-based financing.
(b) With respect to any assumptions about a recipient's future monthly sales, income, or receipts necessary to calculate the disclosures required by this subchapter, a provider shall use the “estimated monthly sales, income, or receipts projection” described below.
(1) The estimated monthly sales, income, or receipts projection shall be calculated as the recipient's historical average of:
(A) The monthly sales, income or receipts volume received through the particular payment channel or mechanism; and
(B) The monthly sales, income, or receipts received through any other payment channel or mechanism that the financing contract would have required recipients to redirect to the particular payment channel or mechanism had the financing contract been operative previously.
(2) For all transactions, or by recipient industry or financing amount (or both), a provider shall fix the number of months used to calculate the recipient's average monthly historical sales, income, or receipts, provided that the period of historical data used by the provider shall not be less than four (4) months or more than twelve (12) months.
(3) When a recipient has not been in operation for the number of months set by the provider as described in subdivision (b)(2) of this section, the provider may calculate the recipient's historical average sales volume, income, or receipts using an average from the months the recipient has been in operation.
(4) Notwithstanding subdivision (b)(2), a provider may exclude from the average calculation required by subdivision (b)(1):
(A) the monthly sales, income, or receipts from any month that is less than the average monthly sales, income, or receipts of the months required to be considered under paragraphs (2) and (3), if the provider determines that the decreased monthly sales, income or receipts volume in that month arose from a cause, such as a natural disaster or uncommon business interruption, that is unlikely to recur during performance of the contract. A provider shall have no liability for failing to exercise the option permitted under this subparagraph.
(B) the monthly sales, income, or receipts from any month for which the recipient failed to provide documentation of average monthly sales, income, or receipts following the provider's request.
(C) the monthly sales, income, or receipts from any number of months at the beginning of the period (starting with the oldest month) set by the provider under paragraph (2), if the provider does not require and receive monthly sales, income, or receipts documentation from those months from the recipient.
(5) In addition to the months considered pursuant to subdivision (b)(2) of this section, a provider may include in its average calculation all or none of the additional months for which the recipient has provided sales, income or receipts documentation, excluding any months in which the recipient was not in operation.
(6) When a provider fixes the number of months it will consider pursuant to subdivision (b)(2), the provider shall record this decision in an internal document that includes the effective date of the provider's decision. If the provider modifies the months fixed pursuant to subdivision (b)(2), the provider shall create a new version of the document required by this paragraph. The provider shall maintain a copy of every version of the document while it is in effect and for a period of four years thereafter.
(c) If a provider must make additional estimates or assumptions other than a recipient's estimated monthly sales, income, or receipts projection to provide disclosures required by this subchapter, the provider shall:
(1) Base those estimates or assumptions on the best information reasonably available to the provider at the time of the disclosure;
(2) State clearly that any disclosure based upon an estimate or assumption is an estimate by adding the word “estimate” to the descriptive language of any required disclosure under this chapter.
(3) State clearly any assumptions or estimates used as the basis for the disclosure in any description associated with the disclosure.

Credits

Note: Authority cited: Sections 321 and 22804, Financial Code. Reference: Sections 22800, 22802, 22803 and 22804, Financial Code.
History
1. New section filed 6-9-2022; operative 12-9-2022 pursuant to Government Code section 11343.4(b)(2) (Register 2022, No. 23). Transmission deadline specified in Government Code section 11346.4(b) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20. Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20.
This database is current through 4/5/24 Register 2024, No. 14.
Cal. Admin. Code tit. 10, § 930, 10 CA ADC § 930
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