Control Agreement Template for England and Wales

A Control Agreement lets a lender take security over a bank account while allowing the account holder to keep using it normally. It's a three-way contract between a bank, the account holder, and the lender who wants security over the account funds - commonly used in English commercial lending and asset-based financing.

Under English law, these agreements give lenders practical control over the account without disrupting daily business operations. The bank agrees to follow the lender's instructions about the account when needed, usually after a default or specific trigger event. Until then, the account holder can keep making deposits and withdrawals as usual, making it a flexible security tool for both sides.

Use a Control Agreement when lending against cash deposits or taking security over bank accounts in England. It's especially valuable for asset-based lending, where lenders need security over a borrower's operating accounts without freezing day-to-day business activities.

This agreement becomes crucial during acquisition financing, working capital facilities, or when setting up cash pooling arrangements. Lenders often require it alongside debentures or charges to ensure effective control over secured accounts. It's particularly important when dealing with revolving credit facilities or when the borrower needs to maintain access to accounts while providing robust security to the lender.

• Blocked Account Control Agreement: Most restrictive type where the account holder has minimal access rights, typically used for escrow-like arrangements
• Securities Account Control Agreement: Specifically designed for investment accounts holding securities, bonds, or other financial instruments
• Bank Account Control Agreement: Standard version for operating accounts, balancing daily access with lender security
• Joint Control Addendum: Adds shared control provisions to existing agreements, often used in syndicated facilities
• Account Control Agreement Collateral: Focuses on accounts specifically designated as collateral for loans

• Lenders/Banks: Require and often draft Control Agreements to secure their position over account assets while allowing business continuity
• Account Holders/Borrowers: Usually companies or businesses that need financing while maintaining operational access to their accounts
• Account Banks: Act as custodians and agree to follow the lender's instructions regarding the controlled account when triggered
• Corporate Lawyers: Draft and negotiate the agreements, ensuring proper security interest and operational flexibility
• Financial Officers: Manage compliance with agreement terms and coordinate between all parties for day-to-day operations

• Account Details: Gather full account information, including account numbers, bank details, and any existing charges or restrictions
• Party Information: Collect accurate legal names, registration numbers, and authorized signatories for all three parties
• Security Terms: Define trigger events, control mechanisms, and operating procedures for the account
• Access Rights: Specify permitted transactions, spending limits, and notification requirements
• Bank Requirements: Check the account bank's specific form requirements and internal approval processes
• Existing Agreements: Review related loan documents and security arrangements to ensure consistency
• Documentation: Our platform generates customized Control Agreements that include all required elements under English law

• Party Identification: Full legal names and details of the lender, account holder, and account bank
• Account Details: Precise description of controlled accounts, including account numbers and sort codes
• Control Mechanisms: Clear terms for when and how the lender can exercise control over the account
• Operating Procedures: Day-to-day account management rules and permitted transactions
• Notice Requirements: Communication protocols between parties, especially for control events
• Bank's Obligations: Specific duties and protections for the account bank
• Governing Law: Express choice of English law and jurisdiction
• Termination Rights: Conditions for ending the agreement and consequences

While both documents deal with access rights, a Control Agreement differs significantly from an Access Agreement. The key distinctions lie in their purpose, scope, and legal implications under English law.

• Primary Purpose: Control Agreements create security interests over bank accounts while maintaining operational flexibility; Access Agreements simply establish rules for accessing facilities or resources
• Parties Involved: Control Agreements require three parties (lender, account holder, and bank); Access Agreements typically involve just two parties
• Legal Effect: Control Agreements create enforceable security rights over financial assets; Access Agreements merely set operational permissions
• Trigger Mechanisms: Control Agreements include specific events that activate the lender's control rights; Access Agreements generally maintain static terms throughout their duration
• Financial Context: Control Agreements are integral to secured lending structures; Access Agreements focus on operational access management