Louisiana wrote revenue-based financing into the statute books, and wrote usury out of it

Louisiana's 2025 law does two things in the same breath. It requires a written disclosure of six figures on a revenue-based financing transaction, and it says the amounts charged in such a transaction — whether called a fee, a discount or anything else — are not interest.

The second half is the more consequential one, and most coverage skips it.

What the statute says

Act 198 of the 2025 Regular Session, House Bill 470, added R.S. 9:3137.10 with an effective date of 1 August 2025.

A revenue-based financing transaction is defined as an agreement under which a person engaged in a commercial enterprise sells or agrees to forward a percentage of sales, revenue or income, with payments that move with business performance. The statute states expressly that such a transaction is not a transaction for the use, forbearance or detention of money.

That phrase is the classical definition of a loan for usury purposes. By declaring the transaction outside it, and by adding that amounts charged are not interest, Louisiana has settled by statute an argument that has been fought case by case in other states: whether a revenue-purchase product is really a disguised loan subject to interest rate limits. In Louisiana, for transactions within the definition, the answer is set out in the text.

The disclosures

The provider must give written disclosure at or before the consummation of the transaction. One disclosure per transaction is enough, and modifying an existing agreement does not trigger a new one. The required elements are:

1. The total amount of funds provided to the enterprise.
2. The total amount of funds actually disbursed, after fees and deductions.
3. The total amount to be paid to the provider.
4. The total dollar cost — the difference between funds provided and total repayment.
5. The manner, frequency and amount of payments, including the methodology for calculating a variable payment.
6. Any costs or discounts available on prepayment.

No annual percentage rate. No estimated term as a separate line — the closest you get is item 5, and only where the payment calculation methodology reveals one.

What the statute does not contain

R.S. 9:3137.10 as enacted does not set out thresholds, an exemption list, or an enforcement mechanism of its own. That is unusual among the state disclosure laws and it matters for expectations: there is no stated dollar ceiling above which the disclosure duty falls away, and no named regulator in the section. Whether other Louisiana law supplies enforcement is a question for the current text and for a lawyer, not for an article.

Reading a Louisiana offer

Because the statute removes the usury argument and does not require a rate, the entire burden of pricing the deal falls on you.

• Start with disbursed, not provided. Item 2 is the money you can spend.
• Total dollar cost divided by disbursed is your cost per dollar received.
• Then get duration in writing. The methodology in item 5 tells you how payments are calculated; ask what revenue assumption the funder used and check it against your own deposits for the last twelve months.
• Ask what happens if revenue falls. On a true revenue-share, low sales mean smaller payments and a longer term at the same total cost. On a fixed-debit structure with a reconciliation, the mechanics — and the paperwork you have to file to get a reconciliation — are where the money is.
• Never accept a factor rate as a price. Illustrative only — a 1.30 factor on $80,000 is $24,000 of cost, and paying that over six months rather than eighteen is roughly three times the annualised burden for exactly the same disclosed dollar figure.

The six figures, worked

Illustrative only — a transaction with 120,000 provided, a 5% fee deducted, and a 1.32 multiple applied to the amount provided.

1. Funds provided: 120,000.
2. Funds actually disbursed: 114,000.
3. Total to be paid to the provider: 158,400.
4. Total dollar cost, as the statute frames it — the difference between funds provided and total repayment: 38,400.
5. Payments: suppose the methodology and your own deposit history imply about eleven months, so roughly 14,400 a month.
6. Prepayment: assume no discount, which is the common answer.

Item 4 is the one to read twice. It is measured against the funds provided, not against the funds you received. Your actual cost is 158,400 less the 114,000 that reached the account, which is 44,400 — 6,000 more than the disclosed figure, or 38.9 cents per dollar you can actually spend.

Add the term yourself and the picture completes: 114,000 received against eleven monthly payments of 14,400 works out at about 5.9% a month, roughly 71% a year on a nominal basis. None of that appears on the form, and none of it is hidden either. It is arithmetic the statute leaves to you.

Do it on every offer, using item 2 as the denominator every time.

Why the "not interest" language should change how you shop

In states where the loan-or-purchase question is unresolved, some businesses have argued after the fact that a high-cost advance was really a usurious loan. Louisiana's statute is designed to take that argument off the table for transactions inside its definition. The practical consequence is that the protection you get in Louisiana is disclosure, not price control, and the disclosure does not include a rate.

So compare offers before you sign, not after. Get two or three, put the six figures side by side, add duration yourself, and treat any funder who will not give you the duration assumption in writing as having answered a different question.

Confirm the current text of R.S. 9:3137.10 before relying on anything here — this section is new and provisions of this kind are commonly amended in the sessions that follow.

This is general information and not legal advice for your situation.