Advances sit outside usury law because they are purchases of receivables rather than loans — which is precisely what makes recharacterisation consequential. A transaction found to be a loan is subject to caps it was never priced against, retroactively.
Recharacterisation
A court or regulator determining that a transaction structured as an advance was, in substance, a loan.
Factor rate
A multiplier applied once to an advance amount to give the total repayment — a $50,000 advance at 1.40 means $70,000 repaid.
APR
The annualised cost of financing, accounting for the repayment schedule as well as the amount charged.
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