Legal Question in Banking Law in Illinois

Assuming this is a commercial loan, lenders want as much security as they can get. Part of that can come in the form of your company's opening and keeping its bank accounts with the lender that would be collateralized with the loan. Put another way, the loan would be secured in part by your deposit accounts. This can be in addition to personal guarantees and other security (mortgages, etc.). If you are a start-up or relatively new company, with no existing relationships, this is not unusual. However, the loan papers should be scrutinized because they could be worded so that if you attempt to open up deposit accounts at other institutions while the loan is outstanding, and they find out about it, that could be deemed a loan breach. And if your loan requires you to submit financials periodically (very common) and they see cash far in excess of what they have on deposit, that too is a potential oops. What you may want to negotiate for now is a maximum amount that you would have to have on deposit at any time, so that your loan is not "overcollateralized", leaving you potentially free to have excess assets banked elsewhere.