We've seen an increasing trend where banks are sweeping their databases to verify that physical addresses are real physical addresses. They are checking to verify that your physical address complies with federal banking regulations in order to open and maintain a U.S. business bank account.
Mailbox addresses, PO Boxes, and registered agent addresses are not allowed. When banks are not able to have a proper physical address on file for your business, they will usually close or suspend your account after 30 days. We'll cover your proof of address options to maintain and open your business bank account below.
What is an Acceptable Physical Address for Your Business Bank Account?
A physical address is an address for a tangible building, which can be a home, office, or an office suite inside a corporate building. Some banks will accept residential or business addresses while others will only accept business addresses.
Banks will do the following to check if your physical address meets with federal banking regulations.
- Banks will check the address against the USPS address database to see if it's a mailbox address. Additionally, some banks will check your address to see if it's a registered agent address as that's also not acceptable.
- Banks will request a proof of address that may be a lease agreement or a utility bill to show that the address physically exists and is owned by you. Some will accept a city or county business license as proof of address. We recommend you call your bank to obtain a list of acceptable documents they will accept before opening a bank account with them.
What is NOT Considered a Physical Address?
The following addresses are not considered physical addresses.
- A Post Office Box also known as a PO Box is a stand-alone lockable mailbox located in a post office.
- Mailbox rental store addresses, such as The UPS Store, Postal Annex, and other local mailbox rental shops.
- Virtual mailbox services or any other addresses that are flagged as Commercial Mail Receiving Agent (CMRA) addresses in the postal address database.
While all of our location addresses are physical addresses, our addresses all need to be marked as a mailbox address according to postal regulations in order for us to be able to tack on mailbox numbers (the "#xxxx" portion of the address). Once our address is marked as a CMRA address, it is no longer considered a physical address but a mailbox address.
Here’s an example of a physical address:
45343 Cold Rd
Dover, DE 82063
Here’s an example of a mailbox address once it’s converted from a physical address:
45343 Cold Rd #8745
Dover, DE 82063
What is the Difference Between a Physical Address and a Commercial Street Address?
There is some confusion out in the market surrounding the use of the phrase “commercial street address.” Our definition of a commercial street address, or commercial address, is an address that points to a commercial building. We use the word "commercial" to differentiate our address from a residential address. We use the word "street" to differentiate our address from a PO Box address.
Most people assume that if you have a commercial street address, then it is also a physical address. A commercial street address does not necessarily mean it's a physical address as defined by the banks. It will depend on whether the commercial address is categorized as a CMRA address.
What is the Difference Between a Physical Business Address and a Mailing Address?
A business address is an address that is used to designate your principal place of business. It is where your business is supposedly operating out of, but may not always be the case.
The business address is required in nearly all aspects of business operations such as:
- Opening bank or merchant accounts.
- Opening accounts with your suppliers and vendors.
- Receiving statements, invoices, payments, and bills.
- Filing for legal contracts, licenses, and permits.
While banks require your business address to be a physical address, your mailing address can be any type of address. The mailing address will be where all your statements and any mail correspondences would be sent to. So in that regard, the physical address is primarily used to satisfy federal banking regulations and certain verification requirements.
What is the Difference Between a Physical Address and a Registered Agent Address?
A registered agent and its address is primarily responsible for receiving and forwarding service of process and other legal documents (ie. lawsuits, legal summons, or subpoenas) on behalf of a business. It is required when forming any state-registered business entities such as an LLC or Corporation.
A registered agent can either be a business or individual. Because of this, all states require that a company’s registered agent maintain a physical address in the state where the LLC or corporation is registered.
What Are My Options for a Physical Address for a Business Bank Account?
There are a couple of ways to get a physical address for a business bank account:
- Use a Residential Address - If the bank accepts a residential address and you happen to have a home in the States, then this is a viable option.
- Real Commercial Office - This will likely be the least flexible and high-cost option, but it will get the job done. Find the smallest office suite you can find out there to reduce the cost.
Neither options are ideal. A residential address means that you will be losing some of your security and privacy. A real commercial office has a higher cost as well as a longer-term commitment.
Announcing TruLease - Our Solution to Getting a Real Physical Address
We are excited to introduce our new TruLease service. With this new service, you will obtain a legal lease agreement for a true physical space.
It is a real lease contract and will satisfy one of the primary requirements when opening a U.S. bank account. Additionally, it will continue to keep your bank account in compliance year after year and eliminate the risk of having your account suspended.
Take a look and learn more about how our TruLease Plan works. We’re open to feedback about the plan, so let us know your thoughts.