The Financial Technology Association (FTA) appreciates the opportunity to raise its concerns with TX HB 700. FTA is a network of fintech leaders shaping the future of finance. We champion the power of technology-driven financial services to catalyze innovation and advocate for modernized policies and regulations that reflect this digital transformation. Fintechs play an important role in providing access to capital for small businesses, including filling credit access gaps when no other options are available.
This financing drives business growth, job creation, and the health of Main Street. FTA believes it is critical for small business owners to be provided with clear information about their commercial financing products so that they can make informed decisions. Commercial financing is distinct from consumer financing in terms of use cases, product structures, borrower sophistication, and demand. Small business owners often assess financing options for very different reasons and on different timelines than consumers. In addition, arbitrary rate caps severely restrict the availability of financing options (given they must remain economically viable to the provider) and reduce choice, especially for certain small businesses who may already struggle to find reasonable financing options due to limited time in business or other factors.
We believe HB 700 could have a detrimental impact on the availability of financing for small business owners located in Texas. Its proposed application of a rate cap on commercial sales-based financing products goes beyond any approach enacted in other states and does not recognize the important role this financing places in the ecosystem.
Read FTA’s full opposition letter here.
On May 27, 2025, FTA signed a joint trades letters to express strong opposition to the Senate amendment to House Bill 700 because it will be a de facto ban on revenue-based financing (“RBF”) in Texas. We urge the Legislature to remove or revise Section 398.056 to avoid the unintended outcome that would drive responsible capital providers out of Texas and deprive small businesses from vital funding at a time when access to capital is more important than ever.
Read the joint trades letter here.