Default rate

A higher fee or interest rate that may apply after a contract default.

Why it matters

It affects how cash, risk, or collection control moves between the business, the factor, and the account debtor.

Related terms

Related article: How invoice factoring works

Related reading

Sources

  • Operating Authority - Federal Motor Carrier Safety Administration. Accessed 2026-05-19. Transportation operating authority context for trucking documentation.
  • International Factoring Association - International Factoring Association. Accessed 2026-05-19. Industry association source for factoring terminology and industry context.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.