§ 5-526 — Interest on secured loans or forbearances

New York § 5-526

• Jurisdiction: New York
• Law GOB: General Obligations
• Title 5: Interest and Usury; Brokerage On Loans
• Art. 5: Creation, Definition and Enforcement of Contractual Obligations

Text

§ 5-526. Interest on secured loans or forbearances. 1. Interest\ncharged on loans or forbearances made to corporations for business or\ncommercial purposes in the amount of one hundred thousand dollars or\nmore and secured in compliance with the uniform commercial code shall\nnot be subject to the limitations of this title or sections 190.40 and\n190.42 of the penal law, if on the date when the interest is charged or\naccrued, such interest is not greater than eight percentage points above\nthe prime rate.\n 2. Such secured loans or forbearances which are made or advanced to\nany one corporate borrower in one or more installments pursuant to a\nwritten agreement which provides for either discretionary or mandatory\nadvances by one or more lenders shall be deemed to be a single loan or\nforbearance for the total amount which the lender or lenders have\nadvanced, if such advances are discretionary, or have agreed to advance,\nif such advances are mandatory, pursuant to such agreement on the terms\nand conditions provided therein.\n 3. For purposes of this section, the loan or forbearance transaction\nmust create a security interest as set forth in section 9--109 of the\nuniform commercial code and must be filed pursuant to article nine of\nsuch code unless filing is not required pursuant to section 9--310 of\nsuch code, or (b) must create a security interest set forth in section\n9--110 of such code.\n 4. For purposes of this section, the prime rate shall equal the\naverage prime rate on short term business loans which is published by\nthe board of governors of the federal reserve system for the most recent\nweek which was publicly available from the board of governors of the\nfederal reserve system on the previous business day.\n