legal
Default
Default is a borrower’s failure to meet the terms of a loan, typically missed payments, covenant breach, or unauthorized second financing.
Definition
What it means.
Default events are defined in the funding agreement. Missed ACH, insufficient funds, stopping an ACH without permission, filing for bankruptcy, closing the business bank account, or taking on a stacked advance are all common default triggers.
Once a loan is in default, the lender can accelerate (demand immediate payment in full), pursue the personal guarantor, file a lawsuit, and, if blanket collateral is in place, seize and liquidate business assets. Always call your funder at the first sign of trouble; cure periods exist for most technical defaults.
Now what?
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