N.Y. General Obligations Law § 5-526: Interest on secured loans or forbearances

§ 5-526. Interest on secured loans or forbearances. 1. Interest

charged on loans or forbearances made to corporations for business or

commercial purposes in the amount of one hundred thousand dollars or

more and secured in compliance with the uniform commercial code shall

not be subject to the limitations of this title or sections 190.40 and

190.42 of the penal law, if on the date when the interest is charged or

accrued, such interest is not greater than eight percentage points above

the prime rate.

2. Such secured loans or forbearances which are made or advanced to

any one corporate borrower in one or more installments pursuant to a

written agreement which provides for either discretionary or mandatory

advances by one or more lenders shall be deemed to be a single loan or

forbearance for the total amount which the lender or lenders have

advanced, if such advances are discretionary, or have agreed to advance,

if such advances are mandatory, pursuant to such agreement on the terms

and conditions provided therein.

3. For purposes of this section, the loan or forbearance transaction

must create a security interest as set forth in section 9--109 of the

uniform commercial code and must be filed pursuant to article nine of

such code unless filing is not required pursuant to section 9--310 of

such code, or (b) must create a security interest set forth in section

9--110 of such code.

4. For purposes of this section, the prime rate shall equal the

average prime rate on short term business loans which is published by

the board of governors of the federal reserve system for the most recent

week which was publicly available from the board of governors of the

federal reserve system on the previous business day.