Small Business Financing Transparency Act would create a new standard for APR disclosure and strengthen competition in small business lending

Springfield, IL (February 5, 2026) – The American Fintech Council (AFC), the largest industry association representing both responsible fintech companies and innovative banks, was on the ground with small business owners, advocates, and state lawmakers in Springfield, Illinois to call for passage of the Small Business Financing Transparency Act (HB744 HA #1). The proposed bill, championed by the Woodstock Institute, would require non-bank small business lenders to disclose the Annual Percentage Rates (APRs) for all loans, giving entrepreneurs full transparency into the true cost of lending.

Under current law, small businesses are excluded from the APR disclosure requirements that have governed consumer lending for decades. As a result, many non-bank lenders use opaque pricing structures that mask the true cost of credit. In Illinois alone, these practices are estimated to cost small businesses approximately $450 million each year – a cost that disproportionately affects Black and Hispanic-owned businesses, which more often rely on non-banks due to barriers in traditional lending.

“Small and local businesses are the backbone of our economy and they expect and deserve fairness and transparency from the financial system,” said Phil Goldfeder, CEO of the American Fintech Council. “In small business lending, APR has long been the gold standard for understanding the cost of credit, and small businesses should have that clarity. This bill will empower entrepreneurs with the transparency they need and ensure responsible lenders can compete on a level playing field.”

The absence of a universal pricing benchmark makes it difficult for business owners to compare lending options and increases the likelihood that borrowers will select unnecessarily expensive products. Research from the Federal Reserve confirms that when APR is not disclosed in small business lending, borrowers are more likely to choose higher-cost lending, draining resources that could otherwise be invested in growth, jobs, and local communities.

“Extending APR disclosures to business credit will ensure that small business owners and entrepreneurs have the same protections and information as they do with consumer loans,” said Ashley Urisman, Director of State Government Affairs at the American Fintech Council. “In turn, this will help these individuals make better, more informed business decisions and allow them to keep prices affordable for their customers and continue to serve their communities.”

AFC encourages Illinois legislators to advance the bill, and looks forward to continued collaboration with the state legislature to improve competition, lower borrowing costs, and strengthen Illinois’ small business ecosystem.

A standards-based organization, the American Fintech Council (AFC) is the largest and most diverse trade association representing financial technology (fintech) companies and innovative banks. On behalf of over 150 member companies and partners, AFC promotes a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy. AFC members foster competition in consumer finance and pioneer products to better serve underserved consumer segments and geographies.

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