Direct answer
Yes, but only with a court judgment. A funder cannot freeze your account on its own. If you signed a confession of judgment, it can get that judgment in New York without a lawsuit or notice, and a restraining notice can hit your bank within days. Without a COJ, the funder must sue first, which takes weeks to months.
How the freeze actually happens
Nearly every MCA contract selects New York law and New York courts. Once the funder holds a judgment there, its attorney sends a restraining notice under New York CPLR 5222 to your bank. Banks comply nationally through their New York branches or correspondent relationships. The account is frozen for twice the judgment amount, and you often learn about it when a card is declined.
If your state is not New York, the funder then domesticates the judgment locally to levy the funds. Domestication is a filing, not a new trial, and usually takes two to six weeks.
Why the confession of judgment matters
A COJ is a signed affidavit admitting the debt in advance. With one, the funder skips the lawsuit. New York stopped entering COJs against out-of-state debtors in 2019, but New York businesses can still be hit, and some funders still include COJs governed by other states. Check page one of your agreement and any separate affidavit you signed at funding.
Without a COJ, a funder must file suit, serve you, and win or obtain a default judgment. That is your window to negotiate or defend.
What to do if your account is frozen
Do not open a new account and move receivables into it without advice; that can be treated as fraudulent transfer and worsens your position. Get the judgment paperwork from the bank, confirm the amount, and contact counsel or a relief firm the same day. Judgments can be vacated for defective service or improper COJ entry, and most funders will settle a judgment for less than face value because collecting is slow and expensive for them too.
Key takeaway
A freeze requires a judgment. If you have a COJ in your contract, treat every missed payment as urgent; if you do not, you have time to negotiate before anything reaches your bank.
Cite: Zogby, “Can an MCA funder freeze my business bank account?”, updated Sep 14, 2026.