Court of Appeal (Cal.) Affirms Judgment for Floorplan Lender against Dealer; Says Floorplan Lender’s Unlicensed Status at the Time of the Loan Did Not Void the Commercial Loan

Defendants contend the February 6, 2009 promissory note is illegal because plaintiff was not a licensed finance lender under the Finance Lenders Law (Fin. Code, § 22000 et seq.) at the time it was executed. Financial Code section 22009 provides: “ ‘Finance lender’ includes any person who is engaged in the business of making consumer loans or making commercial loans.” Financial Code section 22100, subdivision (a) provides: “No person shall engage in the business of a finance lender or broker without obtaining a license from the commissioner.” Defendants contend that because plaintiff obtained its finance lender license after the signing of the February 6, 2009 promissory note, the note was void. . . . It is undisputed the promissory note at issue is a commercial loan within the meaning of Financial Code section 22502.  The Finance Lenders Law provides a penalty for willful violations concerning commercial loans, namely a fine and possible imprisonment. (Fin. Code, § 22780.) However, the loan is not rendered void under the Finance Lenders Law. This is in contrast to consumer loans, in which a willful violation of the Finance Lenders Law does result in the loan being void. (See Fin. Code, § 22750.) Thus, even if we were to find plaintiff had violated the Finance Lenders Law, the commercial loan at issue here is not void. (See Fin. Code, § 22001, subd. (c) [commercial loans not subject to article 2 of chapter 4 of the Financial Code, in which section 22750 appears].) Because we find the promissory note is not void under the Finance Lenders Law, we need not decide the parties’ remaining arguments on this topic.