Acceleration Clause

What Triggers Acceleration

The loan documents define the events of default that allow acceleration. Common triggers in commercial loans include:

• A missed or late payment beyond any grace period
• Failure to pay property taxes or keep required insurance
• Breach of a financial covenant, such as a minimum DSCR (see covenant default)
• An unapproved sale or transfer, often handled by a separate due-on-sale clause
• Borrower bankruptcy or a judgment lien against the property

Many commercial notes require written notice and a cure period before the lender can accelerate, and some let the lender accelerate immediately. The exact wording controls, so owners should read the default and remedies sections with a Florida attorney.

What Changes When a Loan Is Accelerated

• The full balance is due now. A loan maturing in 2029 can become due this month.
• The payoff grows. Default interest, late charges, attorney fees, and costs are added, so a payoff letter is good only through its stated date.
• Refinancing gets harder. Bank and DSCR lenders usually want the loan brought current first, and many cap mortgage late payments at two in the last 24 months.
• Foreclosure usually follows. In Florida, the lender files a judicial foreclosure, which takes months and gives the owner time to act.

Florida Example: An Accelerated Loan on a Special-Purpose Building

A South Florida owner of a roughly 5,200-square-foot automotive service building missed payments, and the bank accelerated the loan. The payoff letter showed about $2.07 million, plus later fees and costs, even though the original maturity was years away.

The owner wanted a cash-out refinance. The DSCR lender that engaged required the loan brought current first, allowed no more than two mortgage late payments in 24 months, capped cash-out at 70% of value, and would not lend cash-out on a vacant building. At 70% LTV, the property needed to appraise at about $2.96 million just to pay off the bank. The outcome turned on reinstatement: without it, the realistic paths were a bridge loan, a negotiated payoff, or a sale. The full walkthrough is in Can You Refinance After the Bank Accelerates the Loan?

Options After Acceleration

• Reinstatement: pay the arrears, fees, and default interest so the loan is current again. Florida does not give commercial borrowers a general statutory right to reinstate after acceleration, so the lender must agree.
• Refinance: usually through a bridge or private lender while the loan is in default.
• Negotiate: a forbearance agreement, loan modification, or discounted payoff.
• Sell: a market sale, short sale, or deed in lieu of foreclosure.
• Redeem: under section 45.0315, Florida Statutes, the owner can pay off the full debt until the clerk files the certificate of sale, unless the judgment sets an earlier time.

What does acceleration clause mean in commercial real estate?

An acceleration clause is the provision in a commercial loan that lets the lender declare the entire unpaid balance immediately due after an event of default, such as a missed payment or covenant breach. After acceleration, the original maturity date no longer applies, the payoff grows with default interest and fees, and the lender can move to foreclose.

Can a lender accelerate a loan without notice?

It depends on the loan documents. Many commercial notes require written notice and a cure period before acceleration, while others allow immediate acceleration after certain defaults. Florida foreclosure procedure adds its own requirements once the lender files suit. Owners should have a Florida attorney review the default and remedies sections of their note and mortgage.

Can I refinance after my loan is accelerated?

Sometimes, but most bank and DSCR lenders require the loan brought current first, and many allow no more than two mortgage late payments in 24 months. Bridge and private lenders are the usual source while a loan is in default, at higher rates and lower leverage. Linton Global Solutions is a brokerage, not a lender, and uses Linton LenderMatch to put these deals in front of independent lenders.

What is the difference between an acceleration clause and a due-on-sale clause?

An acceleration clause is the general remedy that makes the full balance due after a default. A due-on-sale clause is a specific trigger that lets the lender accelerate if the property is sold or transferred without its consent. A due-on-sale clause works through acceleration, but acceleration can be triggered by many other defaults.

Can an accelerated loan be reinstated in Florida?

Often, if the lender agrees. Florida does not give commercial borrowers a general statutory right to reinstate after acceleration, so reinstatement depends on the loan documents and negotiation. Separately, the owner can redeem by paying the full debt until the clerk files the certificate of sale under section 45.0315, Florida Statutes, unless the foreclosure judgment sets an earlier deadline.

Article Summary

An acceleration clause lets a lender declare the entire unpaid loan balance immediately due after an event of default, such as a missed payment or covenant breach. After acceleration, the payoff grows with default interest and fees, most bank and DSCR lenders require the loan brought current before refinancing, and Florida lenders typically move to judicial foreclosure. Owners can reinstate with the lender’s agreement, refinance through bridge or private capital, negotiate a forbearance or discounted payoff, sell, or redeem before the certificate of sale under section 45.0315, Florida Statutes.

Key Takeaways

• ✓Acceleration makes the full loan balance due immediately after a default.
• ✓Loan documents define the triggers and any notice or cure period.
• ✓The payoff grows with default interest, late charges, and legal fees.
• ✓Bank and DSCR lenders usually require the loan brought current before refinancing.
• ✓Florida has no general statutory reinstatement right for commercial loans; the lender must agree.
• ✓Redemption runs until the certificate of sale under § 45.0315, Florida Statutes.

About Michael R. Linton

Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39 years in commercial real estate, first in Chicago and now in Florida, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.

Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving a network of banks.

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Works Cited

1. Florida Legislature. "Section 45.0315, Florida Statutes: Right of Redemption." leg.state.fl.us, http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0045/Sections/0045.0315.html. Accessed Oct 14, 2026.
2. Florida Legislature. "Chapter 702, Florida Statutes: Foreclosure of Mortgages and Statutory Liens." leg.state.fl.us, http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0702/0702.html. Accessed Oct 14, 2026.
3. Legal Information Institute, Cornell Law School. "Acceleration Clause." law.cornell.edu, https://www.law.cornell.edu/wex/acceleration_clause. Accessed Oct 14, 2026.

Disclosure & Compliance

Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.

Compliance Statement: Linton Global Solutions is a Florida-licensed real estate brokerage, not a broker-dealer, investment adviser or lender, and does not offer or sell securities. CREDDS and REOMind.ai provide decision support only. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.