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Merchant Cash Advance Lockbox

What it is and How it works

Merchant Cash Advance Lockbox

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What is a Merchant Cash Advance Lockbox? and How it can keep you safe!

What is a Lockbox?

A merchant cash advance Lockbox is a bank account that two parties (usually business partners) have limited access to. it is also one of the ways that credit card split can be initiated without the need of switching your credit card processor.



First the Name! Lockbox – what does that mean?


It’s simply a bank account that’s opened for both the Merchant and Funder.  Neither can make changes to the account without the others agreement and approval.  That keeps you safe, because you will have a login and have access to everything that’s going on with the account.  Transparency is a great thing!


How does the process work?

Setting up a Lockbox is a 3 step process.

  1. Open the account – literally apply for and get approved for a new business bank account with an FDIC insured bank. this is usually done by the funder within a day because they have strong relationships that help expedite the process.
  2. Change deposit information – after receiving the new routing and account numbers for the account. The merchant calls their processor and directs them to change the banking info. This might require a simple DDA switch form depending on the processor.
  3. Monitor the account – both the merchant and funder will have independent online access to the account where transactions can be monitored. as soon as batched begin to appear the process is complete!


Partner Processor

If you use a partner processor you don’t need a Lockbox



If you don’t use a partner processor. A Lockbox account is put in place.

Why is it used? What are the advantages and disadvantages?

Lockboxes are setup in lieu of a merchant switching their processing provider. they might not want to switch because of an existing relationship or a complex point of sale system, so they opt for setting up a Lockbox. the main disadvantage is that it adds 24 hours to the batching process.
After reading this article it should be easier to find the best merchant cash advance company. Good luck on your search!

Interested in finding out more about Merchant Cash Advance? 

Click Here

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