It happened rather fast…so fast that I was actually unaware of the investigation by Capital One and BBT into me and Ultimate SEO LLC. But lets go back before that and I’ll explain how after 15 yrs of banking with Capital One I’ve been banned for life.
The First Business Bank
I started my own business in 2018 and quickly needed an business checking account, separate from my personal checking. I’b been banking with Capital One for over a decade but I had never heard anything about business banking with them and so I opted for Azlo Bank.
After the pandemic hit and the PPP loans were to be grabbed up through private financial institutions I was baffled how Azlo Bank had no relationship with the SBA and dumped us on Fundera who in turn would match us with a bank. See I thought I had one but I was wrong.
How My Accounts Grew Quick
I decided a little bit before this to incorporate a tech training nonprofit called LFI. Louisville was lacking technical competent workers and I was having to train folks too much to really get much value from their help. It too needed a bank account.
So Ultimate SEO had one that didn’t do SBA and LFI needed an account and I still needed a personal account. Heres where the twist enters … to do all that we wanted with LFI we determined we needed to license a school. LFI wasnt meant to be a school and as a tax exempt entity I didn’t want its primary income to be unrelated to its mission
Kentucky Technical University was born as I partner nonprofit with LFI to train, advocate, supply and teach technology in Kentucky. It needed a bank account.
See all of these 4 entities needed legally separate accounts. But I didn’t want all my eggs in one basket, a single point of failure. So Ultimate SEO opened a BBT and Fifth Third account. KTU opened a Fifth Third Account, LFI had a new Azlo Bank account and I kept my Capital One account. These all opened in about 2 months of each other and during that time I moved houses and rented an office.
I also decided that for long term plans KTU would own a subsidiary named Blizzard SEO, where students could work with real clients and actually make money. Blizzard would be a wholly owned subsidary of KTU. Blizzard was for profit but 100% owned by a nonprofit. Blizzard SEO opened a BBT account.
What then came about was money moving you see Ultimate SEO LLC is a for profit it can make contributions to the nonprofit’s needs. At the same time with funds from stuff like the PPP loans money was ear marked for payroll and other allowed expenses. So just as fast as the PPP money came in it was already headed out the door.
So What Went Wrong?
One day my Capital One account stopped functioning. I couldnt use it or the thousand dollars in it. This was my personal account dont forget, that I’d had through 3 mergers over 15 years and never had a problem.
The had frozen my accounts. Apparently a deposit of 13,000 from one of the company accounts which was then dispersed to the nonprofits caught their attention. Additionally, they wanted to know why I had opened 2 more checking accounts with them. I explained … Auto Billing, I cant control my money if they are passing it out to everyone, so I prefer to keep money in a seperate account, thats not accessible using the debit card. I can thn move money into the main account when I needed it and the other checking was just an additional “bucket”. I would put stuff like rent in one and entertainment in another, Either way I pointed out no one has complained from a deposit or purchase side.
A Guardianship Account
Well, apparently a teen account I had also made for a friend of mine was causing them concern. It was a teen account. I know the friend has had banking issues but I would pas him money now and then if he needed it. Rather than always having to run out to an ATM he got a debit card from the account and I got to manage the balance.
Well…fast forward to BBT as you may recall I created a Ultimate SEO and a Blizzard SEO account there. My Fifth Third Ultimate SEO account had money in it so I used it to fund or donate to the Blizzard SEO account. As this was a donation I made the donation to the Nonprofit that owned Blizzard SEO and that nonprofit then dispersed the funds to its subsidiary Blizzard SEO. It was a capital contribution.
They mis-underestimated me”George W Bush
Now heres how they saw it apparently. I had created a number of accounts within a short period and was moving money around amongst them, between banks and through companies.
Capital One gave me no notice…and never asked a question, they simply closed my accounts and said I was no longer welcome. I was astonished…cause everything I was doing was legal, in fact the reason I was doing it this way was to keep it legal. When you have 2 501c3 organizations you want to retain your exempt status so you keep the organization on mission and a clear distinction on what money was whos money.
Swift Judgement From Capital One and BBT
Capital One though cut me a check for my balance and that was it. I took the check from the mail and deposited it into BBT Ultimate SEO account. The next day BBT froze that account and in a couple days closed my Ultimate SEO account. They couldnt really explain why or how and they seemed more confused than I. But heres how BBT really screwed me up … they sat on the money I had deposited for over a month. No one returned my calls and due to the pandemic I couldnt go into the branch and talk it all out.
Finally I got the money from BBT but damage had been done…these two had wiped out my personal checking accounts as well as my backup accounts for my main business. It took capital out during the pandemic that I needed and exacerbated revenue and payment issues.
I was never given a chance to answer to their assertions and their assertions were vague if not wrong.
So I ‘d warn self employed people or startups from using either Capital One or BBT. They WILL treat you like a felon without ny proof and you’ll be convicted before you know you’re on trial.
So avoid BBT or now Truist, as well as Capital One. Be weary of a business bank account with a bank that has no dealings with SBA lending. (Azlo) The hands down best I found Fifth Third to be the moet level headed of these organizations.
More than Me
Think this is a one off kinda thing? https://milesperday.com/2017/06/capital-one-shuts-checking-accounts/ check out thsi former Capital One customer of 10 yrs,
Been shafted by Capital One or BBT? Recommend a bank good for agile entrepreneurs?