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La. Rev. Stat. § 9:3509 (2026)

Rate of interest paid for commercial, business, or agricultural loans; rate upon default

✓ current as of May 2026
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§3509.  Rate of interest paid for commercial, business, or agricultural loans; rate upon default

A.  Notwithstanding any other provisions of the law of this state to the contrary, any debtor that is a domestic corporation, a limited liability company formed pursuant to the laws of this or any other state, a foreign corporation, a partnership in commendam formed pursuant to the laws of this state, a registered limited liability partnership formed pursuant to the laws of this or any other state, a foreign limited partnership, or a partnership in which all of the partners are either corporations, limited liability companies formed pursuant to the laws of this or any other state, foreign limited partnerships, partnerships in commendam, or partnerships comprised of corporations, foreign limited partnerships, or partnerships in commendam, or registered limited liability partnerships formed pursuant to the laws of this or any other state, or ordinary partnership or any other person or individual borrowing funds for commercial, business, or agricultural purposes or deferring payment of an obligation for commercial, business, or agricultural purposes, may agree to pay interest in excess of the maximum rate of conventional interest authorized by the laws of this state, whether in connection with unsecured or secured indebtedness and whether the secured indebtedness is secured, in whole or in part, directly or indirectly, by a real estate mortgage or chattel mortgage on property in this state or is otherwise secured, and as to any such agreement such debtor shall be prohibited from asserting a claim or defense of usury or of the taking of interest in excess of the maximum rate of conventional interest, and any person whatsoever signing as co-maker, guarantor, or endorser for such debtor shall also be prohibited from asserting any such claim or defense.  The term "foreign limited partnership", as used hereinabove, shall mean any partnership domiciled in any state of the United States, other than Louisiana or the District of Columbia, which shall have been formed and is existing pursuant to the limited partnership law or Uniform Limited Partnership Law of any such state, and such partnership need not qualify as a partnership in commendam under the laws of this state.

B.(1)  Notwithstanding the provisions of Subsection A of this Section, and unless otherwise agreed in writing after the default, a lender may not prospectively increase the simple interest rate under a commercial, business, or agricultural purpose loan following declaration of the obligor's default except as follows:

(a)  With respect to obligations having an original principal balance of two hundred fifty thousand dollars or less, the fixed simple interest rate shall not be prospectively increased to a rate greater than eighteen percent per annum or three percentage points over the original, fixed contract rate in effect prior to default, whichever is greater.

(b)  With respect to obligations having an original principal balance in excess of two hundred fifty thousand dollars, the fixed simple interest rate shall not be prospectively increased to a rate greater than twenty-one percent per annum or three percentage points over the original, fixed contract rate in effect prior to default, whichever is greater.

(2)  This Subsection shall apply only to fixed rate, simple interest commercial, business, and agricultural purpose loans, promissory notes, and other obligations entered into on or after September 7, 1990, which provide for a prospective increase in the interest rate following the obligee's declaration of an obligor's default.  This Subsection shall not apply to consumer credit transactions or other consumer obligations, or to loans, notes, or other obligations that do not bear interest at a fixed rate and on a simple interest basis prior to a declaration of default.  This Subsection shall also not apply to commercial, business, or agricultural purpose loans, notes, or other obligations which are contractually subject to the laws of another state notwithstanding the fact that the obligor may be located or have facilities in Louisiana or that loan proceeds or a portion thereof may be utilized in Louisiana.

(3)  The exclusive remedy that may be asserted against a lender or other obligee for a violation of this Subsection is the return of any excessive post-default interest that may have been assessed and collected.  Specifically, the obligor shall have no rights under R.S. 9:3501.

Acts 1990, No. 734, §1; Acts 1990, No. 847, §1; Acts 1991, No. 697, §1; Acts 1995, No. 782, §1; Acts 1997, No. 1295, §1.

Notes of Decisions
Cited in 10 cases (1 in the last 5 years), 1975–2024 · leading case: Vignette Publications, Inc. v. Harborview Enter., Inc., 799 So. 2d 531 (La. Ct. App. 2001).
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Vignette Publications, Inc. v. Harborview Enter., Inc., 799 So. 2d 531 (La. Ct. App. 2001). · cites it 2× “R.S. 9:3509 provides an exception to the prohibition of charging interest on interest for | (¡commercial, business or agricultural purposes.”
Succession of Drake, 359 So. 2d 249 (La. Ct. App. 1978). · cites it 2× “Appellee contends the service charges were authorized by LSA-R.S. 9:3509 (Act 313 of 1970; repealed by Act 454 of 1972) and LSA-R.”
Spencer v. Boucher, 587 So. 2d 97 (La. Ct. App. 1991). · cites it 3× “However, LSA-R.S. 9:3509, as it read at the time this case arose, provided an exception to this maximum interest rate for loans made for business or commercial purposes: Notwithstanding any other provision of the law of this state to the contrary, any debtor that is a domestic…”
Fed. Sav. & Loan Ins. Corp., as Receiver for Sun Belt Fed. Bank, F.S.B. v. Frederick H. Kroenke, Jr., 858 F.2d 1067 (Fed. Cir. 1988). “R.S. 9:3509 (1983) prohibits a debtor in a commercial transaction from asserting usury as a defense, and the loan to Kroenke was to be used to acquire rental property — a commercial purpose.”
Whitehurst v. James Noel Flying Servs., 509 So. 2d 1035 (La. Ct. App. 1987). “See also R.S. 9:3509. Because the plaintiff signed the contract as co-maker with Source Properties, Inc.”
Liberty Mut. Fire Ins. Co. v. The Shaw Grp., Inc. (M.D. La. 2024). · cites it 7× “R.S. § 9:3509; Vignette Publ’n, Inc. v. Harborview Enters.”
S. Eq. & Tractor Co. of Shreveport, Inc. v. Mccullen, 319 So. 2d 511 (La. Ct. App. 1975). “The principle issues on appeal relate to (1) finance or service charges of 1½% per month charged pursuant to Act 313 of 1970 (formerly LSA-R.S. 9:3509; repealed by Act 454 of 1972, the Louisiana Consumer Credit Law, effective January 1, 1973) and included in the amount of the…”
Schoemann v. Precious Minerals Mining & Refining Corp. (M.D. La. 2020). “R.S. 9:3509, which governs interest on commercial and business loans, permits a lender to prospectively increase the simple interest rate of commercial loans with a principal balance of less than $250,000 to the greater of eighteen percent or three percentage points over the…”
Royal Alice Props., LLC v. AMAG, Inc. (Bankr. E.D. La. 2020). “§ 9:3509(A). 7 As stated, neither AMAG nor the Debtor provided in any detail a choice-of-law analysis.”
Dr. Albert Lagraize Versus Rachele Basler, Derrick Riley & People Speak, L.L.C., 304 So. 3d 102 (La. Ct. App. 2020). “R.S. 9:3509(A) further provides that “Notwithstanding any other provisions of the law of this state to the contrary, any debtor that is .”
La. Rev. Stat. § 9:3509(A): 2 cases
Royal Alice Props., LLC v. AMAG, Inc. (Bankr. E.D. La. 2020). “§ 9:3509(A). 7 As stated, neither AMAG nor the Debtor provided in any detail a choice-of-law analysis.”
Dr. Albert Lagraize Versus Rachele Basler, Derrick Riley & People Speak, L.L.C., 304 So. 3d 102 (La. Ct. App. 2020). “R.S. 9:3509(A) further provides that “Notwithstanding any other provisions of the law of this state to the contrary, any debtor that is .”
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