Illinois Small Business Loans Lack the Federal APR Disclosure Required for Consumers

Small businesses in Illinois collectively lose about $1 million a day in savings due to unregulated loans. Non-bank lenders utilize a legal loophole to offer loans with interest rates ranging from 48% to more than 350%, often disguising these costs as fees. This occurs because no law exists for small business loans equivalent to the federal Truth in Lending Act, which requires clear disclosure of annual percentage rates in consumer loans. Without these disclosures, entrepreneurs cannot make apples-to-apples comparisons between lending products and sign agreements without knowing the true APR. Lenders may then charge hidden fees when a business owner defaults or when they attempt to repay the loan early by paying down the principal.