It's time for a change, isn't it? Whether your small business is evolving, relocating, or you've simply found a better banking partner, closing your Bank of America small business account requires a systematic approach to ensure a smooth transition. Don't just pull the plug – that can lead to headaches! This comprehensive guide will walk you through every essential step, helping you navigate the process with confidence and avoid potential pitfalls.
How to Close Your Bank of America Small Business Account: A Step-by-Step Guide
Step 1: Let's get started! Have you opened a new business bank account yet?
This is crucial. Before you even think about closing your Bank of America account, you need a new home for your business's finances. This ensures uninterrupted cash flow and allows for a seamless transfer of funds and services. Consider banks that offer features better suited to your current business needs, lower fees, or more convenient online banking.
- Action: If you haven't already, research and open a new business bank account. Don't rush this – choose wisely!
Step 2: Prepare Your Bank of America Account for Closure
This stage involves a meticulous review of your existing account to ensure all outstanding transactions are cleared and linked services are properly transitioned. Skipping this step can lead to significant headaches down the line!
Sub-heading 2.1: Reconcile and Settle All Outstanding Transactions
You want your account to be as clean as possible before closure.
- Clear all checks: Ensure all checks you've issued have been cashed and cleared. It's advisable to stop issuing checks from this account a few weeks before your intended closure date.
- Allow pending transactions to post: Verify that all recent deposits and withdrawals have fully processed and are no longer pending.
- Pay off any negative balances or fees: If your account has an overdraft or any outstanding fees (like monthly maintenance fees), you must settle these before Bank of America will close the account.
- Download statements and transaction history: Bank of America may limit access to your online statements once the account is closed. Download at least the last few years of statements and any transaction history you might need for your records, tax purposes, or auditing.
Sub-heading 2.2: Transition Automatic Payments and Direct Deposits
This is perhaps the most critical part of the preparation. Failing to update these can lead to missed payments, late fees, and disruptions to your business operations.
- Identify all recurring payments: Go through your past statements (the ones you just downloaded!) and make a list of all automatic payments, subscriptions, and recurring bills linked to your Bank of America account. This could include:
- Utility bills (electricity, internet, phone)
- Software subscriptions (CRM, accounting software, project management tools)
- Loan payments (business loans, credit card payments)
- Vendor payments
- Rent/lease payments
- Update payment information: Contact each business or service provider individually and update your payment method to your new business bank account. It's wise to do this well in advance, as some companies may take a few billing cycles to update their records.
- Redirect direct deposits: If you receive direct deposits into this account (e.g., from clients, payment processors), notify all relevant parties and provide them with your new account details.
- Transfer payroll (if applicable): If you use this account for payroll, work with your payroll provider to switch to your new bank account. This is essential to ensure your employees are paid on time.
Sub-heading 2.3: Disconnect Linked Services and Features
Bank of America offers various services that might be linked to your small business checking or savings account.
- Merchant Services: If you have a Bank of America Merchant Services account, contact their team before closing your deposit account. There might be specific procedures to follow or alternative arrangements to make.
- Remote Deposit Online (RDO): If you use RDO, contact the RDO Help Desk to discuss the implications of closing your linked deposit account.
- Overdraft Protection (e.g., Balance Connect™): Turn off any overdraft protection services linked to this account.
- Associated credit cards or loans: While closing a deposit account doesn't directly impact credit, ensure any Bank of America business credit cards or loans are managed separately. You don't want any confusion.
Sub-heading 2.4: Empty the Account Balance
Once all transactions have cleared and all recurring payments are rerouted, you need to bring your Bank of America account balance to zero.
- Transfer funds: The easiest way is to electronically transfer the remaining funds to your new business bank account. This usually takes a few business days.
- Withdraw cash or request a cashier's check: If the balance is small, you might prefer to withdraw it as cash. For larger balances, you can request a cashier's check made out to your business.
Important Note: If your account balance is more than $25,000 and you plan to mail a written request for closure with a cashier's check, Bank of America may require your letter to be notarized.
Step 3: Gather Necessary Documentation
When you're ready to formally request closure, having the right documents on hand will expedite the process.
- Government-issued photo ID: For authorized signers.
- Business name and address: Your registered business name and current business address.
- Tax Identification Number (TIN): Your Employer Identification Number (EIN) or Social Security Number (SSN) if you're a sole proprietor.
- Account number(s): The specific account numbers you wish to close.
- Proof of authorization: Depending on your business structure, this could include:
- For LLCs: Articles of Organization, Certificate of Formation, or Operating Agreement.
- For Corporations: Corporate Resolutions or Board Meeting Minutes authorizing the account closure.
- For Partnerships: Partnership Agreement outlining the authority to close accounts.
- Formal closure request letter (if mailing): This should include your business name, address, account number(s), and a clear statement requesting account closure. All authorized account owners must sign this letter. If you have a remaining balance, specify how you'd like it handled (e.g., transfer to another BofA account, cashier's check mailed).
Step 4: Submit Your Closure Request
Bank of America offers a few methods for closing a small business account. Choose the one most convenient for you.
Sub-heading 4.1: In Person at a Financial Center
This is often the most recommended method, especially for business accounts, as it allows for immediate verification and a direct conversation with a banker.
- Schedule an appointment: It's wise to call ahead and schedule an appointment with a small business specialist to ensure they are available and can dedicate time to your request.
- Bring all necessary documents: Refer to the checklist in Step 3.
- Verify your identity: The banker will verify your identity and your authority to close the account.
- Request written confirmation: Before leaving, always request a written confirmation that your account has been successfully closed.
Sub-heading 4.2: Via Phone
You can also initiate the closure process over the phone.
- Call Bank of America Customer Service: Dial 1-800-432-1000.
- Have your account number ready: This will help the representative quickly locate your account.
- Be prepared for identity verification: They will ask security questions to verify your identity.
- Confirm the process: The representative will guide you through the steps and inform you if any additional documentation is required by mail or in person.
- Request written confirmation: Ask for confirmation to be mailed to your business address once the account is closed.
Sub-heading 4.3: By Mail (Written Request)
For a written request, send a letter to the appropriate address.
- Prepare your letter: Include your business name, address, all account numbers you wish to close, and a clear statement requesting closure. State how you wish to receive any remaining balance (transfer to another BofA account if applicable, or a cashier's check).
- Ensure all authorized signers sign: This is crucial for business accounts.
- Notarization (if applicable): If your remaining balance is over $25,000 and you're requesting a cashier's check by mail, get your letter notarized.
- Mail to: Bank of America FL1-300-03-15 PO Box 25118 Tampa, FL 33622-5118
It's highly advisable to send this letter via certified mail with a return receipt requested for proof of delivery.
Step 5: Post-Closure Monitoring and Record Keeping
Your work isn't quite done once you've submitted the request.
- Monitor your new account: Ensure all redirected payments and direct deposits are now flowing into your new account as expected.
- Monitor the old account (if possible): For a few weeks after the closure request, keep an eye out for any unexpected transactions or attempts to debit the closed account. If you encounter any issues, contact Bank of America immediately.
- Destroy old checks and debit cards: Once you receive confirmation of closure, securely destroy any remaining checks and debit cards associated with the closed account to prevent fraudulent use.
- Update internal records: Inform your accountant or bookkeeper about the account closure and provide them with the new banking details. Update your business's financial records accordingly.
- Retain closure confirmation: Keep the written confirmation of account closure for your records. This is your proof that the account is officially closed.
Impact on Credit Score
A common concern is whether closing a bank account will affect your credit score. Generally, closing a checking or savings account does not directly impact your credit score. This is because deposit accounts are not reported to credit bureaus like Experian, TransUnion, or Equifax.
However, there are indirect ways it could have an impact:
- Negative Balance: If you close the account with a negative balance and don't pay it off, the bank could send the debt to a collection agency. A collection account will appear on your credit report and significantly hurt your score.
- Missed Payments: If you fail to update automatic payments for loans or credit cards linked to the closed account, and those payments are subsequently missed, this will negatively impact your credit score.
As long as you follow the steps outlined above, ensuring all balances are cleared and payments are transitioned, you should not experience any negative credit impact from closing your Bank of America small business account.
10 Related FAQ Questions
Here are some quick answers to frequently asked questions about closing a Bank of America small business account:
How to transfer funds from my Bank of America business account before closing?
You can transfer funds electronically to another bank account via online banking or wire transfer. Alternatively, you can withdraw the balance in cash (for smaller amounts) or request a cashier's check for the remaining funds.
How to confirm my Bank of America business account is officially closed?
Always request a written confirmation from Bank of America. This can be mailed to your address or provided in person if you close the account at a financial center.
How to handle outstanding checks when closing my Bank of America business account?
Ensure all checks you've issued have cleared before initiating the closure. It's best to stop issuing checks from that account a few weeks prior.
How to close a Bank of America business account with a negative balance?
You must pay off any negative balance or outstanding fees before Bank of America will process the account closure.
How to update recurring payments tied to my Bank of America business account?
Contact each vendor, service provider, or utility company individually and provide them with your new bank account details for direct debits.
How to update direct deposits to my new business account?
Notify all parties that send direct deposits to your business (e.g., clients, payment processors) and provide them with your new bank account information.
How to get old statements after closing my Bank of America business account?
It's highly recommended to download all necessary statements and transaction history before closing your account, as access may be limited or unavailable afterward.
How to dispose of my Bank of America business debit card and checks?
Once the account is confirmed closed, securely destroy your debit card (cut it into multiple pieces) and shred any unused checks to prevent unauthorized use.
How to close a Bank of America business account if I have associated merchant services?
Contact Bank of America's Merchant Services team before closing your deposit account to ensure a smooth transition and avoid any disruptions to your payment processing.
How to avoid fees when closing my Bank of America business account?
Ensure all outstanding fees are paid and that your account balance is at zero. While Bank of America generally doesn't charge a fee for closing a standard checking/savings account, you might incur fees if you have a negative balance or specific linked services. Review your account's fee schedule.
