The agreement states the factoring agreement is not a loan. However, It also states
"In any event the court deems that the purchaser has charged or received interest in excess of the highest applicable rate, the rate hereunder shall be automatically reduced to the maximum rate allowed by law and the purchaser shall promptly refund the purchaser in excess of the maximum allowable rate."
Would this meet the "true test" of a sales of a receivable or is it more properly characterized as a loan?
How would calculate the effective interest rate if it is deemed a loan, would it be based on the net proceeds $29,500 or obligation amount $37,800?
The quotation pertains only to the usury laws and has nothing to do with deciding whether there was a true sale.
To calculate an effective interest rate you need to know the length of time involved, which you do not show above.
Also, a factor usually charges interest if the receivables are not realized in cash after a certain time, and you do not provide that info.
Lastly, are the receivables sold with or without recourse?