General Overview for B2B Usury Laws

Exemptions and Variability

• Commercial Loan Exemptions: Many states exempt commercial or business loans from their general usury statutes. This means that businesses often negotiate loan terms freely without the same interest rate caps that apply to consumer loans.
• Written Agreements: Some states allow for higher interest rates if the parties agree in writing.
• Large Loans: Certain states have higher interest rate caps or no caps at all for large loans, which are often used in a business context.

Federal Preemption

• National Banks: National banks may be exempt from state usury laws due to federal preemption and can charge interest rates based on the laws of the state where the bank is located, as per the National Bank Act.

Examples of State Usury Laws for B2B Loans

States with Notable Exemptions or Higher Caps

• California: For commercial loans, particularly those over $300,000, California does not impose the same interest rate caps that apply to consumer loans.
• New York: Commercial loans over $250,000 are exempt from the state's general usury cap.
• Texas: There is a general exemption for commercial loans from the state's usury laws, allowing for greater flexibility in interest rates.

States with Specific Statutes for Commercial Loans

• Florida: For loans exceeding $500,000, Florida law generally allows parties to contract for any interest rate.
• Illinois: Commercial loans are generally exempt from the state's usury statute, allowing for market-based interest rates.

States with No Specific Caps for B2B Loans

• Delaware: There is no specific usury cap for commercial loans, and parties can contract for any agreed-upon rate.
• South Dakota: There is no usury limit for commercial loans, and the state is known for its favorable laws for lenders.

States with Unique Provisions

• Ohio: While Ohio has usury laws, they are complex and contain many exceptions, including for business loans.
• Missouri: Missouri has a tiered structure for usury caps, with different rates applicable depending on the type of loan and the amount.

Conclusion

For business-to-business loans, many states offer exemptions from consumer usury caps or have higher thresholds, reflecting the nature of commercial lending and the assumption that businesses are more sophisticated parties. The specific terms of B2B loans are often the result of negotiations between the lender and borrower, and the agreed-upon interest rates can be significantly higher than those allowed for consumer loans.Given the complexity and variability of usury laws from state to state, especially concerning B2B transactions, it's crucial for businesses to consult with legal counsel to ensure compliance with applicable laws. This overview is not exhaustive and is intended to provide a general sense of how usury laws can apply to B2B loans across the U.S. For detailed and current information, businesses should refer to the specific statutes in each state or seek legal advice. I recommend Geraci LLP.