Category Archives: Criminal Usury

New York Court Recharacterizes Merchant Agreement as Loan, Vacates Confessed Judgment and Voids Transaction

A business received financing from an alternative small business funder. The parties’ agreement stated that in exchange for the financing provided, the funder would receive 11.02% of the business’ daily receipts which the funder would take by debiting $331.82 from the … Continue reading

Posted in Criminal Usury, Merchant Cash Advance, New York, Recharacterization, Sale vs. Loan, State Court | Comments Off on New York Court Recharacterizes Merchant Agreement as Loan, Vacates Confessed Judgment and Voids Transaction

Increased Value of Pledged Stock Not Interest

A lender provided a $600,000 loan to a borrower on the condition that the proceeds be used to purchase shares of a publicly traded company. The note provided for an interest rate of 10% and granted the lender warrants to … Continue reading

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Massachusetts State Court Rejects Choice of Law Clause, Vacates Confessed Judgment

A business located in Massachusetts received financing from a small business funder. The parties’ agreement stated that in exchange for the financing provided, the funder would receive 15% of the business’ daily receipts which the funder would take by debiting $1,549 … Continue reading

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Citing Growing Body of Case Law, New York Court Finds Sale of Future Receivables is Not Subject to Usury Laws

A small business funder entered into an agreement with a business to purchase a portion of the business’ future receivables for an upfront lump sum. In exchange for the lump sum payment, the funder was to receive a portion of the … Continue reading

Posted in Civil Usury, Criminal Usury, Merchant Cash Advance, New York, Sale vs. Loan, State Court | Comments Off on Citing Growing Body of Case Law, New York Court Finds Sale of Future Receivables is Not Subject to Usury Laws

In Three Separate Decisions, New York Courts Find Sale of Future Receivables Not Subject to Usury Laws

In three nearly identical cases, a small business funder entered into an agreement with three separate businesses to purchase a portion of the businesses’ future receivables for an upfront lump sum. In exchange for the lump sum payment, the funder was … Continue reading

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Convertible Note with 150% Default Penalty Not Usurious

A creditor purchased four convertible promissory notes from a company. The notes provided that they could be converted to unrestricted common stock of the company at a 45% discount. Upon an event of default, the notes carried a penalty that required a payment from the … Continue reading

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Despite Criminal Usury Claim, Court Compels Arbitration

A New York resident sued an alternative small business lender for, among other counts, criminal usury related to small business financing that the resident’s business had received and that the resident had agreed to guarantee. The agreement included a provision that required that “all … Continue reading

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New York Court Enforces Choice of Law Provision Despite State Usury Law

An alternative small business lender provided a loan to a business. The business later filed suit against the lender in an attempt to void the loan agreement. The business alleged that the agreement violated New York’s criminal usury statute.  The … Continue reading

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New York Court Finds Sale of Future Receivables is Not Subject to Usury Laws

A small business funder entered into an agreement with a business to purchase a portion of the business’ future receivables for an upfront lump sum. In exchange for the lump sum payment, the funder was to receive 9% of the business’ … Continue reading

Posted in Civil Usury, Criminal Usury, Merchant Cash Advance, New York, State Court | Comments Off on New York Court Finds Sale of Future Receivables is Not Subject to Usury Laws

Administrative Order Related to Alleged Usury Violations Unenforceable Against Indian Tribe

In October 2014, the Connecticut commissioner of banking sent a cease and desist order to two limited liability companies allegedly created by a federally recognized Indian tribe. The commissioner alleged that the companies had made usurious consumer loans and had operated … Continue reading

Posted in Connecticut, Criminal Usury, State Court, Tribal Immunity | Comments Off on Administrative Order Related to Alleged Usury Violations Unenforceable Against Indian Tribe