Business Debt Restructuring in Georgia: 7 Laws That Change Your Leverage (2026)

What Georgia Law Gives You, and Exactly Where It Runs Out

Your funding agreement says New York governs it, your collector has already told you that ends the conversation, and on one narrow question your collector is right. Choice of law governs how a court reads the words in the contract. It does not govern what a creditor may seize inside this state, which of your personal assets survive a guarantee, how a Cobb County garnishment summons works, or how long an execution stays alive on the general execution docket. Those questions run on Georgia statutes no matter what the funder printed on page eleven, and in a workout they are usually the questions that move a number.

Some of the seven below help you and some of them hurt, and you are better served by knowing which is which before you pay anyone to argue. Georgia does have a commercial financing disclosure law, and it does ban a broker from taking money before your deal closes. Georgia also has almost no civil usury ceiling left on a commercial transaction over $3,000, a disclosure statute that says in plain words that a violation changes nothing about enforceability, and a consumer protection act that a purely commercial dispute has a hard time getting inside. A survey that tells you Georgia registers commercial financing brokers is wrong, and we will show you where in the statute the absence sits.

Seven laws, taken in the order a Georgia restructuring actually collides with them, starting with the paper you signed and ending with the summons that shows up at your bank.

1. The Disclosure Duty That Started on New Year’s Day 2024

Senate Bill 90 of the 2023 session added O.C.G.A. §10-1-393.18 to the Fair Business Practices Act, and Section 7 of the act set it running on January 1, 2024. Subsection (e)(1) requires a provider to disclose the terms of a commercial financing transaction before consummating it, and (e)(5) confines that duty to transactions consummated on or after that date. If your advance funded in 2022 or 2023, the statute never reached it, which is the first thing worth checking and the fact most readers get wrong. Subsection (e)(2) adds a second limit that funders rely on: only one disclosure is required per transaction, and none is triggered by a later modification, forbearance or change.

Coverage turns on subsection (b), which lists twelve exclusions. The transaction falls outside the statute if it is more than $500,000, if it is secured by real property, if it is a lease or a purchase money obligation, if it is vendor financing from a manufacturer or distributor, or if the funder is a federally insured depository, a bank affiliate, a Farm Credit lender or a licensed money transmitter. There is one more that matters in a stacked file: a provider closing five or fewer commercial financing transactions in Georgia in any twelve month period is exempt, and subsection (a)(10) defines a provider as somebody consummating more than five in a calendar year. Small shops sit outside this law entirely.

What a covered funder owed you sits at (e)(3): the total funds provided, the total actually disbursed if fees or a prior payoff cut into it, the total to be paid, the total dollar cost figured as the difference between the first and the third, the manner and frequency and amount of each payment or the estimated first payment where the amount varies, and a statement of any prepayment cost or discount with a reference to the contract paragraph that creates it. Subsection (e)(4) requires the agreement itself to describe the methodology behind a variable payment. Count what is missing. There is no annual percentage rate anywhere in the Georgia list, so the arithmetic that turns a factor rate into a number you can compare to a bank loan is work nobody did for you.

2. Subsection (f)(1) and the Check Your Broker Cashed First

The one prohibition in the Georgia statute that describes conduct rather than paperwork is at O.C.G.A. §10-1-393.18(f)(1): no broker shall assess, collect, or solicit an advance fee from a business to provide services as a broker. Subsection (a)(2) defines an advance fee as any consideration assessed or collected before the closing of a commercial financing transaction, and (a)(3) defines a broker as somebody who arranges the deal for compensation and communicates the offer to a business located in this state, while expressly excluding a provider and anyone whose pay does not depend on the terms of the deal. The carve-out is deliberately tight. You can be asked to fund an actual service such as a credit check or an appraisal of security, but only where the payment goes by check or money order to a party independent of the broker.

Two more prohibitions ride alongside it and get overlooked. Subsection (f)(2) bars a broker from false or misleading representations or the omission of any material fact in the offer or sale of its services, and it does so notwithstanding the absence of reliance by the buyer, which removes the element that usually kills a fraud claim on a broker who overpromised. Subsection (f)(3) bars any false or deceptive representation in the broker’s business dealings generally. Together these are the reason a Georgia file with a broker in it is often stronger than the same file without one.

Now the part you should hear before you spend money on it. Enforcement runs through the Attorney General under subsection (g), penalties under (h) are $500 per violation capped at $20,000 for everything arising from the same set of transaction documents, and (i) doubles that to $1,000 and $50,000 once a written notice of a prior violation has landed. Subsection (j) says nothing in the section creates a private right of action. So the advance fee your broker took is a documented regulatory exposure that a funder’s counsel would rather not carry into a settlement conversation, and it is not a lawsuit you file. We work through what that is actually worth on our page about Georgia disclosure defects and MCA leverage.

3. Why Georgia Barely Has a Civil Usury Ceiling Anymore

This is the item that decides whether a rate argument exists for you at all, and Georgia’s answer is unusual. O.C.G.A. §7-4-2(a)(1)(A) sets the legal rate at 7 percent per annum simple interest where no written contract establishes one, and then gives the parties freedom to set any rate by written contract where the principal amount is more than $3,000 and less than $250,000, provided the rate is expressed in simple interest terms as of the date of the evidence of indebtedness. Subsection (a)(1)(B) removes even that formality once the principal reaches $250,000, permitting any rate and any charges. The only real ceiling in the section is at (a)(2), which caps interest at 16 percent per annum simple on principal of $3,000 or less.

Read that against a typical advance. A $60,000 funding is above $3,000 by a factor of twenty, and there is a written agreement, so Georgia’s civil usury law imposes no rate limit on it whatever. This is exactly the opposite of New York, where a corporation still has the criminal usury defense at 25 percent under Penal Law §190.40 and where a criminally usurious loan is void in its entirety after Adar Bays v. GeneSYS ID, 37 N.Y.3d 320 (2021). A Georgia lawyer telling you to lead with usury on a $60,000 advance either has not read §7-4-2 or is thinking about a different state’s statute.

The practical consequence for a workout is that your leverage in Georgia rarely comes from what the money cost. It comes from the reconciliation term, from stacking and priority under Article 9, from the broker conduct in item two, and from the procedural mistakes creditors make after judgment. That is a different negotiation than the one a New York merchant runs, and the funders that fund heavily into Atlanta and Savannah know it. If you are carrying four or five positions, the sequencing problem is bigger than the rate problem, and we treat that separately on our page about restructuring with four or more positions.

4. The Criminal Line at Five Percent a Month, and the Sentence Guarding It

One rate rule survives everything in §7-4-2. O.C.G.A. §7-4-18(a) makes it a misdemeanor for any person, company or corporation to reserve, charge or take, for any loan or advance of money, a rate of interest greater than 5 percent per month, whether directly or indirectly by way of commission for advances, discount, exchange, or any other contract or contrivance. Five percent a month is 60 percent a year, and subsection (b) says the section is cumulative of the usury laws rather than a replacement for them, while (c) confirms that §7-4-2 and §7-4-3 do not modify it. That is the one Georgia number a hard-money advance can actually cross.

Getting there requires the transaction to be a loan or an advance of money in the first place, and here Georgia did something no other state in the eleven did. O.C.G.A. §10-1-393.18(c) provides that for purposes of Chapter 1 of Title 7, which is where both §7-4-2 and §7-4-18 live, a provider’s characterization of an accounts receivable purchase transaction as a purchase is conclusive that the transaction is not a loan and not a transaction for the use, forbearance or detention of money. On a covered deal, the funder’s own label ends the argument by statute.

That makes subsection (b) the whole ballgame for anyone thinking about rate. If your transaction fell outside the statute, because it funded before January 1, 2024, because it exceeded $500,000, because your funder closed five or fewer Georgia deals in the twelve month window, or because it was not an accounts receivable purchase at all, then (c) never attached to it and the ordinary substance-over-form inquiry is still open. A Georgia attorney should be running the coverage test before the rate test, not after. Nobody should be treating a Georgia rate theory as a plan until that sequence is finished.

5. The Voidable Transactions Act, and the Year You Should Be Auditing

Georgia renamed its fraudulent transfer article, and the vocabulary matters when you are reading a memo. O.C.G.A. §18-2-70 says that this article, formerly known and cited as the Uniform Fraudulent Transfers Act, shall be known and may be cited as the Uniform Voidable Transactions Act. So Georgia is on the modern uniform act and the operative sections run from §18-2-70 forward, which is different from Florida, where chapter 726 is still the older transfer act. If your counsel is citing section numbers in the 270s or the 3439s, that is New York or California law, not what a judge in Fulton County Superior Court will apply to your transfers.

The two tests are at §18-2-74. Subsection (a)(1) reaches a transfer made with actual intent to hinder, delay or defraud any creditor, and subsection (b) gives the court eleven factors to weigh on intent, including transfer to an insider, retention of possession or control after the transfer, concealment, a suit already threatened or filed, a transfer of substantially all assets, and insolvency at or shortly after the transfer. Subsection (a)(2) requires no intent at all: no reasonably equivalent value in exchange, plus either unreasonably small remaining assets for the business the debtor was conducting or debts the debtor believed or should have believed it could not pay. Section 18-2-75 adds the present creditor version keyed to insolvency, and its subsection (b) reaches an insider paid on an antecedent debt.

The deadlines at §18-2-79 are what a restructuring plan has to be built around. An actual intent claim is extinguished four years after the transfer, or one year after it was or reasonably could have been discovered, whichever is later. The constructive claims under §18-2-74(a)(2) and §18-2-75(a) run four years flat. The insider claim under §18-2-75(b) runs only one year. This is the section people read after they have already moved equipment into a new entity, which is the wrong order. Nothing in a workout should move until a Georgia attorney has dated it and valued it, and the transfers most likely to be examined are the ones already behind you.

6. Georgia’s Consumer Statute Was Not Written for Your Company

The Fair Business Practices Act of 1975 is at O.C.G.A. §10-1-390 et seq., and §10-1-393(a) declares unlawful unfair or deceptive acts or practices in the conduct of consumer transactions and consumer acts or practices in trade or commerce. Subsection (b) then lists thirty-five examples, and the commercial financing section you have been reading about, §10-1-393.18, was dropped into this same part by SB 90. That placement leads people to assume a business can sue on it, and it is worth being precise about why that assumption fails on two independent grounds.

The first ground is the definition. O.C.G.A. §10-1-392(10) defines consumer transactions as the sale, purchase, lease or rental of goods, services or property, real or personal, primarily for personal, family or household purposes. A merchant advance taken to make payroll is the opposite of that by definition, and Georgia courts have long read the act as aimed at the consumer marketplace rather than at business-to-business dealing. The private action at §10-1-399 does allow any person to sue, and §10-1-392(24) defines person to include a corporation, so standing itself is not the problem. The problem is that the conduct has to have occurred in the consumer marketplace.

The second ground is the express one. Section 10-1-393.18(j) states that nothing in that Code section creates a private right of action for failing to comply with it, so even a Georgia business squarely inside the consumer definition could not bring the disclosure claim. Where the FBPA does apply, it is worth knowing what it carries: §10-1-399(a) gives general and exemplary damages, treble actual damages for an intentional violation, and attorney’s fees, but it forbids bringing the action in a representative capacity, so there is no class action. Subsection (b) requires a written demand for relief delivered at least thirty days before filing, and §10-1-401 gives two years from when the claimant knew or should have known, or two years after a state proceeding ends, whichever is later.

7. The Garnishment Chapter Georgia Rewrote in 2016

Georgia replaced its garnishment chapter after a federal court found the old version constitutionally deficient, and the current O.C.G.A. §18-4-1 et seq. is the machinery that will actually be pointed at you. Two numbers explain why the bank account is the first target. Under §18-4-4, a garnishment served on a financial institution that is not a continuing garnishment captures what is there on the date of service through the next five days, and under §18-4-10 that bank must answer not sooner than five days and not later than fifteen days after service. Every other garnishee, meaning your customers and anyone else who owes you money, is captured for twenty-nine days and answers between thirty and forty-five days after service.

The defendant’s side of the chapter is real but short. Under §18-4-13 the garnishee has to serve its answer on you as well as the plaintiff, along with a Notice to Defendant of Right Against Garnishment and a claim form, and the plaintiff then gets twenty days from actual notice of that answer to traverse it. You become a party by filing a claim under §18-4-15 stating why the money or property is exempt, and a judge is required to set a hearing not more than ten days from the date the claim is filed. Ten days is a genuinely fast track by state court standards, and it is worthless if the notice sat unopened at an old registered agent address.

The pressure this puts on third parties is the part that costs you relationships. Under §18-4-21 a garnishee that has not answered within forty-five days of service is automatically in default, and it may open that default as of right only by answering within fifteen days and paying costs; after that a default judgment may be entered against it for the full amount remaining due on the judgment against you. Section 18-4-22 shortens the trigger to fifteen days for a financial institution. Section 18-4-24 lets a garnishee move within ninety days to cut that judgment down to $50 plus what it actually owed you, which is a repair, not a shield. Your bank and your best customer both learn quickly that ignoring the summons is expensive, and they act accordingly. The full sequence is on our page about what a Georgia creditor can seize.

Where Georgia Stands on a Confession of Judgment Clause

Georgia does recognize a confession of judgment, and that surprises people who have read that most states banned them. What Georgia recognizes is much narrower than the instrument in your contract. O.C.G.A. §9-12-18(a) gives either party the right to confess judgment without the consent of the adversary, and then subsection (b) puts two conditions on it: no confession may be entered except in the county where the defendant resided at the commencement of the action, and the action must have been regularly filed and docketed as in other cases. There is no Georgia mechanism for walking an affidavit into a clerk’s office and getting a judgment where no lawsuit exists.

That leaves the out-of-state judgment as the live risk for a Georgia business, and Georgia’s domestication article at O.C.G.A. §9-12-130 et seq. is faster than most people expect. A judgment creditor files an authenticated copy with the clerk, the clerk mails notice and docketing follows, and no statutory waiting period stands between the filing and an execution. The full analysis, including how a jurisdictional attack under 28 U.S.C. §1738 works and what deadline actually binds you, is on our page about whether a confession of judgment is enforceable in Georgia.

Who Should You Call? Our Top-Rated Business Debt Firms

One firm on this list works the entire lifecycle of a business debt file, from stopping the daily debits through attorney-led negotiation, UCC lien removal, and a signed release. The other two cover broader debt categories that often sit alongside the advances. Choose accordingly.