A lock box agreement is a service offered by banks to companies in which the company receives payments by mail to a post office box and the bank picks up the payments several times a day, deposits them into the company's account, and notifies the company of the deposit. This enables the company to put the money to work as soon as it's received, but the amounts must be large in order for the value obtained to exceed the cost of the service.
This lock box agreement is to be used by the collateral agent for a syndicate of banks to receive, control and apply to the Borrower's line of credit, payments made on the debtor's accounts receivable collateral. This agreement when executed, perfects the secured party's security interest in funds in the lock box account by control under Uniform Commercial Code § 9-104(a)(3) by making the agent bank the owner of and party in whose name the account is held. Because the account is controlled by ownership in the name of the secured party, the lock box bank cannot offset claims it has against the debtor against the account as provided in Uniform Commercial Code § 9-340(c). To avoid any doubt on this issue, the lock box bank expressly waives its rights of setoff. On the other hand, the agent bank agrees to indemnify the lock box bank for any unpaid fees or claims concerning the account, in the event the debtor fails to do so.
This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
The Lima Arizona Lock Box Agreement is a specialized cash management system designed for lenders to streamline the processing of loan payments and improve funds availability. This agreement serves as a secure repository for borrower payments, allowing lenders to efficiently manage their cash flow and ensure timely collection of funds. One type of Lima Arizona Lock Box Agreement is the Standard Lock Box Agreement. Under this agreement, borrowers submit their loan payments to a designated Lima Arizona Lock Box address. These payments are then processed by the lock box provider, who makes daily deposits into the lender's bank account. This automated process eliminates the need for manual payment handling, reducing processing time and potential errors. Another type of Lima Arizona Lock Box Agreement is the Remote Deposit Lock Box Agreement. With this agreement, borrowers retain the option to make loan payments electronically or through physical checks. In the case of physical checks, borrowers capture an electronic image of the check using remote deposit technology and transmit it securely to the lock box provider. The provider then processes the check, making deposits into the lender's account. This agreement offers added convenience and flexibility for borrowers while maintaining the efficiency of the lock box system. Utilizing the Lima Arizona Lock Box Agreement as a cash management system with lenders brings several benefits. Firstly, it centralizes the payment process, making it easier for lenders to track and reconcile payments. This enhanced oversight helps identify any discrepancies or delinquencies promptly, allowing for timely follow-up actions. Secondly, it accelerates access to funds as payments are processed swiftly, thus optimizing cash flow for lenders. Lastly, the lock box system ensures the security and confidentiality of borrower payment information, reducing the risk of fraud or unauthorized access. In summary, the Lima Arizona Lock Box Agreement offers lenders an efficient and secure cash management system for loan payments. By utilizing either the Standard or Remote Deposit Lock Box Agreement, lenders can streamline payment processing, enhance cash flow, and ensure the confidentiality and security of borrower information.The Lima Arizona Lock Box Agreement is a specialized cash management system designed for lenders to streamline the processing of loan payments and improve funds availability. This agreement serves as a secure repository for borrower payments, allowing lenders to efficiently manage their cash flow and ensure timely collection of funds. One type of Lima Arizona Lock Box Agreement is the Standard Lock Box Agreement. Under this agreement, borrowers submit their loan payments to a designated Lima Arizona Lock Box address. These payments are then processed by the lock box provider, who makes daily deposits into the lender's bank account. This automated process eliminates the need for manual payment handling, reducing processing time and potential errors. Another type of Lima Arizona Lock Box Agreement is the Remote Deposit Lock Box Agreement. With this agreement, borrowers retain the option to make loan payments electronically or through physical checks. In the case of physical checks, borrowers capture an electronic image of the check using remote deposit technology and transmit it securely to the lock box provider. The provider then processes the check, making deposits into the lender's account. This agreement offers added convenience and flexibility for borrowers while maintaining the efficiency of the lock box system. Utilizing the Lima Arizona Lock Box Agreement as a cash management system with lenders brings several benefits. Firstly, it centralizes the payment process, making it easier for lenders to track and reconcile payments. This enhanced oversight helps identify any discrepancies or delinquencies promptly, allowing for timely follow-up actions. Secondly, it accelerates access to funds as payments are processed swiftly, thus optimizing cash flow for lenders. Lastly, the lock box system ensures the security and confidentiality of borrower payment information, reducing the risk of fraud or unauthorized access. In summary, the Lima Arizona Lock Box Agreement offers lenders an efficient and secure cash management system for loan payments. By utilizing either the Standard or Remote Deposit Lock Box Agreement, lenders can streamline payment processing, enhance cash flow, and ensure the confidentiality and security of borrower information.
