“Commercial loan” means a loan of a principal amount of five thousand dollars ($5,000) or more, or any loan under an open-end credit program, whether secured by either real or personal property, or both, or unsecured, the proceeds of which are intended by the borrower for use primarily for other than personal, family, or household purposes.
For purposes of determining whether a loan is a commercial loan, the lender may rely on any written statement of intended purposes signed by the borrower. The statement may be a
separate statement signed by the borrower or may be contained in a loan application or other document signed by the borrower. The lender shall not be required to ascertain that the proceeds of the loan are used in accordance with the statement of intended purposes.
Notes of Decisions
Cited in
3
cases (
2 in the last 5 years), 2019–2025 · leading case:
T'Bear v. Forman, 359 F. Supp. 3d 882 (N.D. Cal. 2019).
T'Bear v. Forman, 359 F. Supp. 3d 882 (N.D. Cal. 2019).
· cites it 2× “" Cal. Fin. Code § 22502 . Here, the notes at issue on Defendant's motion for summary judgment all have a principal amount of $ 5,000 or more.”
Drakeford v. Capital Benefit, Inc., No. 3:20-cv-04161 (N.D. Cal. July 8, 2022).
“Defendants rely on Cal. Fin. Code § 22502 , which provides that in 14 determining whether “a loan is a commercial loan, the lender may rely on any written statement of 15 intended purposes signed by the borrower.”
Side, Inc. v. Off. Partners New York, LLC, No. 3:24-cv-07135 (N.D. Cal. Jan. 13, 2025).
“And because the purpose of the loan 17 was to allow Official Partners to invest in its business (which is the Alexanders’ business), for an 18 amount over $5,000, the Note is considered a “commercial loan” governed by Chapter 3 of the 19 California Financial Code.”
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