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California required disclosures

CA Fin Code § 22337 applies to consumer lending rather than commercial lending, which is why you will not see statements/disclosures further to it in our California commercial loan doc sets.
 
For commercial lending specifically, the relevant disclosure requirement falls under CA Fin Code § 22802, which requires a financing disclosure; provided, however, that disclosure is not always required and is subject to several exemptions, most notably when the commercial loan is secured by real property. (See CA Fin Code § 22801.)
 
That said, in the event a lender or its loan does not fall within one of those exemptions, the lender must present that disclosure to the borrower pre-closing. (See § 22802(a).) The statute states that the lender "shall obtain the recipient's signature on the disclosure before consummating the commercial financing transaction." (Id.)
 

That disclosure is not required in every commercial loan. There are several exceptions, and one of the biggest ones is when the business loan is secured by real estate. If a loan falls under one of those exceptions, the disclosure does not have to be provided.

If a lender does not qualify for an exception, then the lender must:

  • Give the disclosure to the borrower before the loan closes, and
  • Get the borrower’s signature on that disclosure before completing the transaction.