DACA Account

A Deposit Account Control Agreement (DACA) is a legal agreement between a business borrower, a lender, and the bank where the borrower holds a deposit account. It gives the lender a level of control over that account, typically to secure repayment of a loan or credit facility. In simple terms, a DACA ensures the lender has rights to the funds in the account under certain conditions, making the deposit account part of the lender’s collateral package. 

DACAs are commonly used in secured lending, asset-based loans, and revolving lines of credit, especially when receivables or cash flow are key to repayment. The agreement outlines when and how the lender can take control of the account, such as during a default, while allowing the business to operate normally in the meantime. Overall, a DACA helps lenders reduce risk and provides added structure around cash management in business financing.