New York state legislators introduced the FAIR Business Practices Act in early March 2025, in hopes of providing small businesses more ways to defend themselves from unfair, abusive, and deceptive conduct. Protections that are currently only available to consumers within the state.
The Fostering Affordability and Integrity through Reasonable (FAIR) Business Practices Act intends to add a provision to New York’s General Obligations Law, Section 349, to offer small business owners and not-for-profits some protections previously afforded only to consumers. Legislators introduced the bill, reasoning that “there is no reason to believe that a small entity is any better able to defend itself from unfair, abusive, and deceptive conduct than a consumer, or needs the protections of this article any less than a consumer does.”
If enacted, the FAIR Business Practices Act will offer better protection from deceptive and abusive business acts (known as UDAP statutes), including not-for-profits and small business owners.
The bill references small businesses tricked into predatory loans. This brings to mind the merchant cash advance industry, which is currently unregulated. A law extending protection to small businesses can offer them and New York State protection against predatory “lending” by the merchant cash advance industry. The state has already brought several actions against predatory merchant cash advance companies.
Defining Small Businesses
The bill, with the addition of GBL 349, defines a “small entity” as a business or professional corporation or company, a not-for-profit corporation, an unincorporated association, or a partnership that:
- Is independently owned and operated
- Is not dominant in its field
- Is either a not-for-profit corporation or employs three hundred or fewer persons
- Received in the past fiscal year gross revenue and support in an amount less than five hundred million dollars
- Possessed total assets in the last fiscal year of not more than two hundred fifty million dollars
The bill seems to expand the definition and protection to more than small businesses. According to statistics published by the state in 2019, “Of the small businesses with paid employees in 2016, almost two-thirds had fewer than five employees, with over 81 percent having fewer than 10 employees.”
Entrepreneurship in NYC is at an all-time high, according to the New York City Economic Development Corporation (NYCEDC). NYCEDC defines small businesses as businesses with 50 or fewer employees.
It will be interesting to see what the final law will look like. But rest assured, New York has every intention of expanding its protections to include small business owners, not-for-profits, and solo entrepreneurs. And, the bill comes at a time when federal oversight is on the decline.
We will continue to follow and report on the status of the bill as it makes its way through the process. Follow along with our blog posts for more debt collection and debt defense news.
