On June 10, 2026, Justice Doyle of the Seventh Judicial District Commercial Division issued a decision in Bizfund, LLC v. Elks Constr., LLC, 2026 NY Slip Op. 32089(U), holding that a receivable purchase agreement was not an usurious loan, explaining:
The Court rejects the defendants’ argument that the agreement is a usurious loan. To determine whether a transaction constitutes a usurious loan: The court must examine whether the plaintiff is absolutely entitled to repayment under all circumstances. Unless a principal sum advanced is repayable absolutely, the transaction is not a loan. Usually, courts weigh three factors when determining whether repayment is absolute or contingent: (1) whether there is a reconciliation provision in the agreement; (2) whether the agreement has a finite term; and (3) whether there is any recourse should the merchant declare bankruptcy.
The agreement between plaintiff and defendants contained a right of mandatory reconciliation. The agreement required reconciliation to occur upon request. Additionally, the agreement did not have a finite term and was subject to a downturn in Defendants’ business. Finally, the agreement did not make as a condition of default the Defendants filing for bankruptcy. Thus, the agreement was not a loan contract, and it is not subject to the usury laws.
(Internal quotations and citations omitted).