How to Get a Business Credit Card With EIN Only

An Employer Identification Number (EIN) serves as a unique federal tax identification number for businesses, similar to a Social Security number for individuals. This identifier plays a significant role in establishing a business’s financial identity, distinct from its owner’s personal finances. Obtaining a business credit card based on an EIN allows for the clear separation of business and personal expenses, which simplifies accounting, streamlines tax preparation, and contributes to building a strong credit profile for the business entity. This separation is a foundational step in fostering a business’s financial independence and growth.

Understanding EIN-Only Business Credit Cards

The term “EIN-only” in business credit cards refers to an application process where the lender primarily evaluates the business’s financial health and credit history, rather than relying heavily on the owner’s personal credit score. This approach distinguishes business credit from personal credit, recognizing the business entity as a separate financial individual. For a card to be truly “EIN-only,” the approval decision should be based on the business’s unique credit profile, tracked by specialized business credit bureaus.

These business credit bureaus, such as Dun & Bradstreet, Experian Business, and Equifax Business, collect data on a company’s payment performance, trade lines, and public records. They generate a business credit score, which reflects the company’s reliability in meeting its financial obligations. While the primary focus is on business data, some lenders may still conduct a “soft” personal credit inquiry on the owner for identity verification or to assess character. However, the core approval decision remains tied to the business’s established creditworthiness.

Establishing Business Credit

Building a strong business credit profile is a deliberate process. It begins with obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS), which is necessary for tax purposes and signifies the business as a distinct entity. Ensure the business is properly registered and in good standing with relevant state authorities.

Separating personal and business finances is a crucial step, achieved by opening a dedicated business bank account. This separation helps maintain clear financial records and demonstrates the business’s operational independence. To further establish a credit file, secure a Data Universal Numbering System (DUNS) number from Dun & Bradstreet. This unique nine-digit identifier is widely used by lenders and suppliers to access a company’s credit report. Businesses can typically obtain a DUNS number at no cost through Dun & Bradstreet’s website.

Establishing vendor or supplier credit, often referred to as “trade credit,” is another effective way to build business credit. This involves setting up accounts with suppliers on “Net 30” terms, meaning payment is due 30 days after the invoice date. Consistent, on-time payments reported to business credit bureaus create positive tradelines that contribute to the business’s credit score.

Paying all business obligations promptly, including utility bills, rent, and loan repayments, is equally important, as payment history is a significant factor. Regularly monitoring business credit reports from major bureaus allows a business to track its progress and identify inaccuracies.

Preparing Your Business Information for Application

Before initiating the application process for a business credit card, gather and organize specific business information. This includes:
The complete legal business name, along with any “Doing Business As” (DBA) names.
Accurate contact details: physical business address, mailing address, primary phone number, and email address.
The Employer Identification Number (EIN), which identifies the business to the IRS and potential lenders.
Business structure: sole proprietorship, Limited Liability Company (LLC), Corporation, or partnership.
Industry type, often categorized by a North American Industry Classification System (NAICS) code, which helps lenders understand the business’s operational context and associated risks.
An accurate annual business revenue figure, demonstrating the company’s financial capacity.
Years the business has been in operation, as a longer history often indicates greater stability.
The number of employees, indicating the business’s scale and operational demands.
Specific details regarding the business bank account, including the bank name and account numbers.

For larger credit lines or certain types of cards, lenders might also request financial statements like profit and loss statements or balance sheets. Ensure all relevant business licenses and permits are current.

Applying for a Business Credit Card

Once preparatory steps are complete and business information is compiled, the application process for a business credit card can begin. Research financial institutions that cater to small businesses and emphasize business credit in their underwriting processes, including larger banks, credit unions, and online lenders. Many applications are completed online, requiring the input of your gathered business information.

During the online application, the Employer Identification Number (EIN) serves as the primary identifier. It allows the lender to access and review the business’s credit reports from commercial credit bureaus, assessing the company’s payment history and overall creditworthiness. While the objective is to secure an “EIN-only” card, some lenders, particularly for newer businesses or those with limited business credit history, may still request a personal guarantee from the business owner. A personal guarantee means the owner agrees to be personally responsible for the debt if the business defaults.

After submitting the application, the business can expect one of several outcomes: an instant approval, a decision pending further review, or a request for additional documentation. If approved, the lender will provide the terms and conditions of the card. The physical card will typically be mailed to the business address within 7 to 10 business days. Upon receiving the card, maintaining a strong business credit profile requires responsible usage, including making all payments on time and keeping credit utilization low.

Citations

https://www.dnb.com/duns-number/get-a-duns-number.html

NAICS Code & SIC Identification Tools