Yes, you can open a new bank account for your business even after a UCC lien has been filed. No law prevents a bank from opening an account for you, and a UCC-1 filing by a financier doesn’t perfect a security interest in your deposit accounts. The financier, however, retains a security interest in any receivables that you have sold to them. In addition, your contract with the MCA may prevent you from using a different bank without their written consent.
Will a bank refuse a new business bank account after a UCC lien?
Federal account-opening rules require banks to identify anyone who owns 25% or more of the business and at least one person with control (like a CEO or managing member). See 31 CFR 1010.230. There is no law that requires the bank to search for UCC filings. Your bank’s relationship with you is also unaffected by a security interest. See UCC 9-341. Nor must your bank sign a control agreement with a financier, even if you ask it to. See UCC 9-342.
Borrowing is different: for a credit line, the bank will probably underwrite and discover the MCA filing. Since the filing occurred first, the MCA financier has the first right to the collateral listed on the UCC-1, and any new lender would be “junior” unless the MCA company agrees to subordinate. See UCC 9-322(a)(1). For more, see our post what an existing MCA UCC filing does to new financing.
Does a UCC lien cover a new business bank account?
No. A security interest in a deposit account can only be perfected by “control.” See UCC 9-312(b)(1). “Control” of a deposit account can only exist if:
- the secured party is the bank itself,
- the debtor, bank, and financier enter into a three-party agreement giving the financier the right to instruct the bank to pay funds to them, or
- the financier becomes a customer of the bank with respect to the account.
See UCC 9-104(a). So a UCC-1 listing “deposit accounts” or “all assets of the Debtor” perfects nothing in your deposit account, old or new. Unless you signed a control or blocked account agreement at your old bank, the MCA never had control there either.
The MCA does, however, have a security interest in the receivables that you sold to them. The sale of receivables (accounts) is governed by Article 9 of the UCC. See UCC 9-109(a)(3). A security interest also attaches to “any identifiable proceeds,” and perfection in identifiable cash proceeds generally continues. See UCC 9-315(a). So, if a customer pays one of the receivables you sold to the MCA into your new account, the payment is still proceeds, and the MCA still has a security interest in it. Whether they can reach them there is a different question; see Can an MCA take money from a second bank account?
Is opening a second account different from moving my deposits?
It depends on your contract. Many contain a term like Cedar’s, which requires you to deposit your receipts into “only one depositing account acceptable to CEDAR.” See CEDAR Advance Corp., Exhibit 10.1 (2023). The same contract states that the merchant “will not, without CEDAR’s prior written consent, change its Processor, add terminals, change its financial institution or bank account.” Its Events of Default don’t list changing banks, but they do include blocking an ACH debit without advance written notice and an alternative method of payment. It also charges a $2,500 blocked account fee. Some other contracts prohibit you from opening or using any business accounts without giving the MCA notice. So, make sure to read your contract.
Here’s how the UCC-1 and your MCA agreement bear on each option.
| What you do | Effect on new account | Contractual risk |
|---|
| Open new account for payroll/taxes and fund from designated account | UCC-1 will not impact new account as all receipts will still pass through designated account first. | Low (unless contract specifically restricts opening of new accounts). |
| Route some proceeds (card or processor) to the new account | Proceeds in new account will still be subject to the funder. | High (depending on contract. See Section 23 of Cedar). |
| Route all deposits to new account and close old account | Same as above. | Very High (in addition to risk above, debits will bounce) |
A covenant breach may also be personal, because many New York MCAs contain guaranties of the performance of all representations, warranties, and covenants in the agreement. See for example, LG Funding, LLC v. United Senior Properties of Olathe, LLC, 2020 NY Slip Op 01607. If your funder is claiming you are in default for opening a new account, read whether changing bank accounts really counts as a breach.
What do I need to send to the funder in order to open a new account?
You should ask them for their written consent. Include in the request:
- Name of bank and last four of account
- Date you plan on routing deposits to the account
- New authorization for ACH debits to the new account
- Verification that you will keep the old account open
What is different in Texas?
Under Section 398.056 of the Texas Finance Code (effective 9/1/2025), a provider cannot initiate an automatic debit from a deposit account unless they have a validly perfected first priority security interest in that account under Chapter 9. See Texas HB 700. The Office of the Texas Consumer Credit Commissioner’s new rules went into effect on 7/9/2026. Violations can lead to penalties up to $10,000 per violation. The Act gives you no private cause of action, but a funder’s request to re-authorize recurring ACH debits on a new account is a compliance question for the funder. How this section interacts with the control-only rule in UCC 9-312 is unclear.
Frequently Asked Questions
Can my new bank be forced to follow the funder's instructions?
No. Pursuant to Section 9-341 of the UCC, the duties of your bank are not affected by a letter the funder sends them. Pursuant to Section 9-342 of the UCC, the bank can even refuse to enter into a control agreement.
Does switching banks stop the funder from contacting my customers?
No. Pursuant to Section 9-406(a) of the UCC, your customers will still be required to pay the funder once notice is given to them.
Can I keep sales in the designated account and open a separate payroll account?
Often yes, but review your agreement. Some agreements restrict you from opening any new business accounts without notice.
What happens if I close the old account?
All of their debits will be returned. Under many agreements (see Cedar for an example) if you do not give them advance written notice and an alternate way of drawing funds, it may be considered an Event of Default.