Usury

Usury

Introduction

The teaching of Usury has not yet been changed by the Church and an individual can contrast a reasonable argument for usury intrinsic injustice validity itself. This paper is proposed to offer commercial lenders exceptions that are available for commercial lending, under state law New York. This paper will provide various Usury provisions of New York law that affect commercial lending in New York. The basic focus would be on the Interest and Usury, it general rules and exception offered to the lender and borrower.

Discussion

As economy is still facing difficult time, the venture capital and private equity firm's portfolio has been suffering. These companies require additional funds in order to meet their expenses which are increasing due to increase in cost of raw material. Banks are unwilling to loan out money, hence, the company's portfolio may have no-where else to turn but to it currents venture capital or private equity. The venture capital or private equity does not want to lose their present investment and maybe conceiving that company could on the small amount of money or cash can overcome and past with their current problem and can accomplished the long term growth and prosperity. They may be enthusiastic to-front the firm, approximately necessitated cash.

For any such loan term, the venture capital or private equity may be eager to create in such kind of cases would of course differs largely relying on the considerations. Therefore, to envision a venture capital or private equity lender, this will not be appalling for an upfront fee and perhaps along with the recurring administrative fee. The issuance of warrants, stocks, preferred stocks or any other securities by the company demanded by the lender for an exchange of loan. These requisites might be seen a reasonable and straightforward, but there are potential legal trap that are lie in wait. If the law of New York is applicable to the transaction and effective interest rate which reply on the terms and conditions may comprises of fees, securities and payment of other consideration towards the lender ahead of the rate of nominal interest surpass 25% per year, the transaction may be violated according to the New York Law against the Usury.

Overview of Usury

If we go back to Aristotle, their condemnation of usury was well clear and was forceful. Aristotle believed that in every business transaction values ??traded goods are equal, and warned that the measure of value cannot “be” in man as very important things comprises of very little value, such as water, while things minor, like diamonds, are very valuable. It is therefore within the interplay of market where the true value. He noticed that, given the market conditions of freedom and equity, in any exchange of one good for another, it has established equivalence between them. For example, when sharing my work a week for a few coins this is stating that this amount of coins equal to my work, which has in fact worth the effort of my ...