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Cure period
Also called grace period, notice and cure, right to cure.
The window a contract gives you to fix a breach before it becomes an enforceable default, which many funding agreements do not provide at all.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
A notice-and-cure provision has three components: the lender must notify, the breach must be curable, and a stated number of days is allowed to fix it. Well-drafted agreements distinguish monetary defaults, with a short cure of a few days, from non-monetary ones such as a late financial statement, with a longer window, and list defaults that are not curable at all, typically fraud, insolvency or unauthorized transfer of collateral.
Bank credit agreements and SBA loan documents normally include them. Equipment leases usually include a short one for payments. Merchant cash advance agreements frequently include none, so a single returned debit or a technical breach is an event of default the moment it occurs, with acceleration available immediately.
The absence matters because of what sits behind it. Where acceleration reaches the full purchased amount and the package includes a confession of judgment, the gap between a bounced payment and a frozen bank account can be days.
In practice funders often forbear on a first returned payment and re-present. Forbearance is not a cure period. It is a commercial choice they can stop making at any time, and it does not waive the default unless the agreement says so or they sign something saying so.
Where this one catches people
Merchants assume a missed payment starts a clock. In many advance agreements it starts nothing, because the default is complete on the event, and the funder may accelerate without notice. Look specifically for the words notice and opportunity to cure in the events of default section; if they are absent, the operating assumption should be that they are absent for a reason.
Where you will meet this term
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Cure period — common questions
What does cure period mean?
The window a contract gives you to fix a breach before it becomes an enforceable default, which many funding agreements do not provide at all.
Where does cure period catch people out?
Merchants assume a missed payment starts a clock. In many advance agreements it starts nothing, because the default is complete on the event, and the funder may accelerate without notice. Look specifically for the words notice and opportunity to cure in the events of default section; if they are absent, the operating assumption should be that they are absent for a reason.
Is cure period the same as an interest rate?
Cure period is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does cure period apply to?
Merchant Cash Advance, Working Capital, Term Loan, Business Line of Credit, SBA Loan, Equipment Financing.
Is there a worked example of cure period?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside cure period?
Acceleration clause, Business days, Covenant, Default, Forbearance.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.