Cash Collateral Account

Last Updated: Jun 6, 2019

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A cash collateral account is a common bank account in a standard ABL facility. All money collected by the borrower will flow to the cash collateral account (either directly by an ACH or wire or via a check to a lockbox). These funds will then be swept each day to pay down the revolving loan balance. A borrower typically does not have access to the cash collateral account and cannot withdraw funds from it.