Can a hold (not Reg CC) be placed on a commercial loan proceeds check (issued by our bank) being deposited into a customers checking account so the funds can be released as needed and approved by us?

Why not just do draws against the loan as needed and approved?

No - that is not how that is done. You place the funds in an escrow or reserve account and disburse according to the loan agreement. Also, make sure that you are not running afoul of State usury laws, since you are advancing the entire loan and charging interest on the whole amount while the borrower is only getting benefit of some of the funds. This sounds like you need to set this loan up as a non-revolving draw loan.

Thank you...I appreciate your responses. I am on the deposit side so loans are not my strong suit. When I was asked about depositing the check and putting a hold on the funds so disbursements could be made, it just sounded wrong to me. I've been in banking long enough to know that didn't sound right!

I will get back with the loan officer and discuss this with them...

Thanks again!