Virginia Code Title 6.2. Financial Institutions and Services § 6.2-2228. Definitions

As used in this chapter, unless the context requires a different meaning:

“Recipient” means a person whose principal place of business is in the Commonwealth and that applies for sales-based financing and is made a specific offer of sales-based financing by a provider. A recipient may also be an authorized representative of such person. A person acting as a broker cannot be a recipient.

“Sales-based financing” means a transaction that is repaid by the recipient to the provider, over time, as a percentage of sales or revenue, in which the payment amount may increase or decrease according to the volume of sales made or revenue received by the recipient. Sales-based financing also includes a true-up mechanism where the financing is repaid as a fixed payment but provides for a reconciliation process that adjusts the payment to an amount that is a percentage of sales or revenue.

“Sales-based financing broker” or “broker” means a person that, for compensation or the expectation of compensation, obtains or offers to obtain sales-based financing from a provider for a recipient.

“Sales-based financing provider” or “provider” means a person that extends a specific offer of sales-based financing to a recipient. Unless otherwise exempt, “provider” also includes a person that solicits and presents specific offers of sales-based financing under an exclusive contract or arrangement with a provider.

“Specific offer” means the specific terms of sales-based financing, including price or amount, that are quoted to a recipient, based on information obtained from or about the recipient, which, if accepted by a recipient, shall be binding on the provider, as applicable, subject to any specific requirements stated in such terms.