MyPillow and CEO Mike Lindell are suing another cash advance company over an alleged illegal loan.

The Chaska-based manufacturer borrowed $1.5 million from Cobalt Funding Solutions in September and agreed to make 50 daily payments for a total repayment of $2.2 million, according to a filing last week in district court lawsuit filed in Carver County.

The resulting interest rate of 409% was “many times higher than the maximum interest rate permitted under the state’s current usury law,” the lawsuit says.

“Cobalt … took advantage of MyPillow, a cash-strapped company that needed money quickly,” the complaint states. “This transaction is an illegal usurious loan,” and MyPillow wants a judge to declare the loan unenforceable and award unspecified damages.

Cobalt did not immediately respond to a request for comment Tuesday.

The companies essentially offer short-term loans to businesses, and the industry engages in “loan sharking,” the lawsuit says. In this case, Cobalt offered to purchase MyPillow’s future receivables and later filed a lien against the pillow manufacturer to seize the funds.

The purchase of future receivables was “merely a sham act with the aim of circumventing the applicable usury law,” according to the lawsuit. “Lenders … make sure they are paid back at highly inflated interest rates no matter what.”