Friday, December 10, 2010

Delaware Usury Exemption

Why is Delaware considered to have a friendly legal environment for corporations?  Well, for a lot of reasons.

One reason I will be focusing on in this post is its usury law.  More specifically, Delaware has a broad and clear exemption from its usury law for transactions over $100,000.

Many states cap the amount of interest a lender can charge a borrower, thereby limiting the access to loans for many businesses with weaker credit. 

In Delaware, a lender may legally charge any rate of interest for a loan over $100,000 which is not secured by a mortgage against a principal residence of the borrower.  See Section 2301(c) of the Delaware Commerce and Trade Code.

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