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Ely
Ely, Counselor at Law
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How is a kicker such as stock treated when calculating the

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How is a kicker such as stock treated when calculating the maximum for usury purposes of 45%
Hello friend and thank you for requesting me.

Can you please tell me more? What kind of a loan is this? How is stock involved?
Customer: replied 3 years ago.


At the time the loan would be made it would have a rate of 15% and the lender would receive stock in the corporate borrower, a private company.

Friend,

Do you mean that if the loan was not paid, then the lender would receive stock in the corporate borrower?
Customer: replied 3 years ago.

No! The lender would receive the stock at the time the loan is made. It is a venture capital transaction. I want to know how the stock would be treated to be sure that the loan would not exceed the Colorado usury limit on non consumer loans

Ah, thank you.

Because the stock option is not interest, it should not be calculated as or part of the overall 45% limit, but would simply be seen as part of the overall consideration of the contract.

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