From the KBM note if the loan is paid off early they get between 115% and 150% depending on how early it's paid off. Which on a per annum basis is several times the 25% maximum allowed. In addition they charge a late fee of $2,000 a day if the loans not paid off in time, plus the default interest rate. Although these charges are not usually used to calculate the interest rate of the note. The courts have found that these charges by themselves also cannot be usuarious. These charges are well documented in the notes which makes them usurious. Hard to say what the court will do but they can void the entire note for this reason.

"In addition, the late charge provision of the letter agreement, which awarded a 120% per annum penalty, "while not technically interest, is unreasonable and confiscatory in nature and therefore unenforceable when examined in the light of the public policy expressed in Penal Law § 190.40, which makes an interest charge of more than 25% per annum a criminal offense" (Sandra's Jewel Box v 401 Hotel, 273 AD2d 1, 3 [2000]; see also BDO Seidman v Hirshberg, 93 [*5]NY2d 382 [1999]; Quaker Oats Co. v Reilly, 274 AD2d 565 [2000]). "The showing, as here, that the [letter agreement] reserves to the lender an illegal rate of interest satisfies [defendant's] burden of proving a usurious loan" (Matter of Dane, 55 AD2d 224, 226 [1976]; see also Hammond v Marrano, 88 AD2d 758 [1982]). This evidence shifts the burden to plaintiff, requiring it to produce evidence negating the application of the usury defense."