it doesn’t work if they are insolvent, and it can also backfire if they see this clause as a way to get a cheap cash loan. you should still have the clause but i think if this as a tool for the collections attorney to use if the customer defaults.

The rates aren't cheap. The standard late payments I've seen work out to approximately 19.5-20% APR.

You set the rate that is punitive.

It doesn’t work when solvency is an issue but you should know your customers and mitigate that risk accordingly