Having a business bank account frozen can be a scary experience. You may not have access to the money you need and you don't know if or when it will be returned. In this post, we'll show you how to unfreeze your business bank account and get back on track with your finances.
Check your credit score
Your credit score is a three-digit number that tells you how likely you are to pay back a loan. If you have high scores, lenders and creditors see you as a low risk and are more likely to give you loans or credit cards. To check your score, go to annualcreditreport.com and sign up for free access to all three of the major credit reporting agencies (Equifax, Experian, TransUnion).
Find out why your bank account has been frozen
The first thing you'll want to do is find out why your bank account has been frozen. You can do this by contacting the bank that holds your business's checking or savings account, and asking them directly. They should be able to tell you why they froze the account, and when it will likely be unfrozen again.
There are many reasons why a bank might freeze an account for business owners:
- Fraud detection software flags unusual transactions on an account—this could mean anything from suspicious purchases made with debit cards, deposits that don't match up with income reported in tax returns, or even money transfers happening too quickly between two different accounts (a sign of money laundering).
- The owner has failed to make payments on mortgages held against land owned by the company (called “mortgage liens”). If there's ever a default on these loans then creditors can attempt foreclosure proceedings against all property associated with those mortgages—including real estate owned by another business entity such as an LLC or corporation! This includes checking accounts holding cash reserves needed for daily operations like rent payments or payroll expenses; therefore if those funds aren't available because they're tied up in frozen accounts then everything else stops until they're released again later down line some time later after someone gets paid back instead which means no one earns any income anymore either way until everything gets sorted out once again."
Pay off any debts owed to the bank
The first step to unfreezing your business bank account is paying off any debts owed to the bank. If you owe more than $250,000, the bank will not unfreeze your account until this debt has been paid in full. The second step involves negotiating a payment plan with your local branch manager if you cannot afford to pay off this debt immediately.
Laine Redpath
Contact the courts or financial institution
If you have been notified that a freeze was placed on your bank account, contact the court or financial institution that requested the freeze. Explain the situation and ask for a release of the freeze. If necessary, provide proof that you have paid off any debts owed to the bank.
Pay off any overdue taxes and submit necessary paperwork
If you have unpaid taxes, it's important to pay them off before opening your business bank account. Your accountant can help with this and make sure that the IRS is satisfied with your payment arrangement.
The next step is to submit the necessary paperwork to open a new business bank account. This may include:
- A copy of your driver's license or passport
- Proof of address (such as utility bills or insurance policies)
- A signed application form
Act quickly and work with your bank
If you need to unfreeze your business's bank account, act quickly and work with your bank. Don't wait until the last minute.
- Try to contact the bank early in the morning before any staff have arrived or after they've left for the evening. This can be done at home by calling them up and asking for an urgent appointment with a manager or senior member of staff; most companies will try to accommodate this request as long as it's within reason. If that doesn't work, call back later in the day when there are more people around who can help with your request and make sure everyone knows what needs doing so everyone is on board with making this happen ASAP!
- Identify exactly how much money has been frozen by checking monthly statements against actuals so there aren't any surprises when trying to unfreeze those funds!
If your business bank account has been frozen, it’s important to act quickly. You can contact the courts or financial institution that requested a freeze on your account and work with them to unfreeze it.
Sinan Elver
Meet wamo! Do not freeze your accounts!
wamo provides business accounts for everyone. It is much more flexible than other traditional banks. If you don't want your account to be frozen unnecessarily, open a business account with wamo. Enter the wamo site in just 10 minutes with your computer or mobile phone. Open an account now!
