According to EASA Technical Manual and NEMA MG1, the definition of Service Factor is:
A multiplier which, when applied to rated power, indicates a permissible power loading that may be carried under the conditions specified for the service factor.
The NEMA MG1-2011 theory of SF says that a motor is thermally capable of overload to that point within the insulation class at normal service conditions. Since any increase in load increases the current, this overload will increase the operating temperature of the motor. For every increase of 10º C, the motor winding expected life is reduced by one-half. It does not matter what the source of that increase in temperature is; overload, poor ventilation, low voltage or high ambient temperature are just a few.
Source of heat
Electric motors, like all electromechanical devices, are not totally efficient. This costs money and requires more power to be produced than is required to do the work. The efficiency of the motor can be expressed as show in Figure 1.
Some of these losses are friction and windage, but most of the inefficiency is the result of winding and core losses. The largest contributor is the winding loss that can be expressed as show in Figure 2.