For Immediate Release:
January 21, 2026
Contact:
Jaclyn Driscoll | jaclyn@sgstrategies.com | (217) 371-7373
Robert Mayo | hello@woodstockinst.org
Loophole exposes Illinois small businesses to APRs over 300%
SPRINGFIELD, IL – Every year, Illinois small businesses lose an estimated $450 million as a result of nontransparent loans that often carry predatory triple-digit interest rates of more than 100%. To address this issue, small business owners, state legislators, and nonprofit advocates gathered at the Illinois State Capitol today to call on lawmakers to pass the Small Business Financing Transparency Act (HB744 HA #1), (a.k.a ‘APR for All’) legislation that would require non-bank lenders to disclose the Annual Percentage Rate (APR) of loans offered to small businesses.
While consumers have long been entitled to clear information about the cost of credit thanks to the federal Truth In Lending Act, small businesses are still excluded from these basic protections. Non-bank lenders, which mostly exist on the Internet, often advertise and make loans using confusing “factor rates” or other pricing schemes that obscure the true cost of borrowing, making it difficult for entrepreneurs to compare their options. While states like California and New York have already passed APR disclosure laws to protect small businesses, Illinois has yet to act despite having some of the strongest consumer financial protections of any state.
“Small businesses deserve the same transparency consumers have relied on for decades,” said Horacio Méndez, President and CEO of the Woodstock Institute. “APR disclosure gives business owners the clear, apples-to-apples information they need to make informed decisions. Without this transparency, business owners are getting bamboozled by high interest rates that are being deliberately obscured to even the most informed consumers.”
The lack of transparency has real consequences, and Black and Hispanic-owned businesses are disproportionately harmed, as they are more likely to rely on non-bank financing due to barriers in traditional lending. APR for All would save Black-owned Illinois businesses $61 million each year and Hispanic-owned Illinois businesses $57 million.
“Hidden loan terms drain wealth from our communities,” said Christy, an Illinois small business owner. “Transparency helps entrepreneurs protect their businesses, their employees and their livelihoods.”
APR has been the gold standard, legally required measure for comparing costs for consumer loans since the passage of the federal Truth in Lending act in 1967, and it’s far past time to extend that same level of transparency to small businesses. In fact, Federal Reserve research shows that when APR is not disclosed, borrowers are more likely to choose unnecessarily expensive financing products.
Furthermore, having a universal standard for price comparison in APR is good for the economy as a whole because transparent, fair competition drives down prices and increases affordability, allowing for more dollars to flow into the economy, instead of into paying down debt.
“This is a commonsense step to level the playing field for Illinois small business owners,” said Jay Goltz, Illinois Small Business Owner for 30+ years. “We urge lawmakers to pass this bill and stand up for small businesses.”
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About the Coalition for Small Business Lending Transparency
The Coalition for Small Business Lending Transparency (CSBLT) is a statewide alliance of small businesses, nonprofits and advocates working to ensure fair, transparent lending practices for Illinois entrepreneurs.
APR for All legislation has been endorsed by: Illinois Treasurer Michael Frerichs, Attorney General Kwame Raoul, Chicago Mayor Brandon Johnson, Cook County Bureau of Economic Development, Cook County Small Business Source.
Member organizations include: AARP Illinois, Accion Opportunity Fund, Allies for Community Business, American Fintech Council, Annie’s Girls Charitable Foundation, Cameo Network, Capital Good Fund, Catholic Conference of Illinois, Chicago Community Loan Fund, Citizen Action Illinois, Claretian Associates, Community Organizing and Family Issues (COFI), Greater Chicagoland Black Chamber of Commerce, House of Mary Maternity Home, Illinois Black Chamber of Commerce, Illinois Hispanic Chamber of Commerce, Jane Addams Resource Corporation, Jewish Free Loan Chicago, National Association for Latino Community Asset Builders, National Community Reinvestment Coalition, Opportunity Finance Network, Responsible Business Lending Coalition, Small Business Advocacy Council, Small Business Majority, Sunshine Enterprises, Trellis, Women Employed, Woodstock Institute, Working Credit.
