[WSBARP] Interest rate for a commercial loan backed by a residential property

[Oscar Yang Esq.]

Hello Listmates--

I recently have run into a commercial loan between two individuals that also has
been secured by a residential property.  On its promisory note, both parties
agreed that it was a commercial loan, and the actual use of the loan was indeed
for the borrower's small business.  Its stated interest rate is between 20 and
25% per annum.  To my knowledge, WA's usury law does not apply to a commercial
loan.  Still, I wonder whether or not we have legal principles or case laws that
define "unreasonable interest rates" for a commercial loan?

Also, if you are aware of any extra issues to consider when a commercial loan is
backed by a residential property, please let me know.

Oscar Yang, Esq. (WA/NY)
Es Berry Law PC
2155 112th Ave NE
Bellevue, WA 98004

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