What the funder can actually do
Acceleration. Most agreements make the entire outstanding balance immediately due on default, so a missed weekly debit can become a demand for the whole remaining amount.
The personal guarantee. Nearly every advance carries one, which means the obligation follows you personally and does not stop at the company.
The UCC filing. A blanket lien on business assets lets the funder claim against receivables and equipment, and it is visible to anyone who searches.
A confession of judgment, if you signed one, allows judgment without you being heard — frequently discovered when an account is frozen.
What actually counts as default
It is broader than missing a payment. Typical triggers include changing bank accounts, taking additional financing, closing or selling the business, and in some agreements a material fall in revenue.
Read the definition before you need it. People routinely default by taking a second advance to fix the first, without realising the first agreement forbade it.
What to do, in order
Call the funder before the debit fails. A file in servicing has options; a file in collections has far fewer, and the line between them is usually a returned payment.
Ask for a reduced debit for a defined period, with statements to evidence the decline. This is the request funders grant most often.
If the business genuinely cannot recover, ask about settlement early. Funders settle, and they settle better while there is still a trading business to settle with.
Take legal advice before signing anything presented as a cure. Forbearance agreements often add terms materially worse than the original.