Obtaining a business credit card with an EIN can be challenging, but the rewards are well worth the effort. With good financial behavior, you can protect your personal assets from business liabilities, and your business will be able to access lower interest rates, higher credit limits, and better payment terms.
In this article, we discuss the current lending landscape and the steps you can take to make getting a business credit card with an EIN only much easier.
Key Takeaways
- To receive a business credit card with an EIN only, register your business, open a business bank account, maintain a professional online presence, maintain accurate business records, establish accounts with vendors, consistently pay your bills on time, and keep an eye your credit report.
- “EIN” is short for employer identification number. It’s a nine-digit number issued by the government that the IRS uses to identify your business for tax and hiring purposes. You may also see EIN referred to as Federal Tax ID Number, Federal EIN, or FEIN. They all refer to the same thing.
- Business credit cards are a form of short-term lending, so many credit card companies rely on your personal credit score (a form of personal guarantee) and established business credit history. Those that rely on your EIN and business activity alone are known as corporate cards.
What Is An EIN?
An EIN (short for employer identification number), or Federal Tax ID Number, is a nine-digit number that the IRS uses to identify your business for tax purposes.
You’ll need to apply for an EIN for any of the following reasons:
- You hire employees
- Your business operates as a partnership or corporation
- You’re involved in mortgage investments
- Your business withholds any income other than wages, or it handles estates, trusts, or IRAs.
The Current Lending Landscape
Business credit cards are a form of short-term lending much like a bank loan. When considering whether to issue cards, many credit card companies rely heavily on your personal credit score (a form of personal guarantee) and established business credit history.
There are, however, different credit options that rely solely on your EIN and business activity. These are known as corporate cards. Most business owners want to go this route because it allows them to separate their personal assets and the business’s liabilities.
You can also do a similar thing with a purchasing card (a.k.a. p-card) if you need to allow your employees to make purchases on their own.
Getting a business credit card with only an EIN can present a unique set of challenges, but it’s entirely achievable with planning, effort, and good financial behavior.
How To Get A Business Credit Card With Only An EIN
The main goal of the steps below is to build a good business financial reputation so that credit card companies see you as low-risk and are willing to partner with your operation.
Register Your Business
Even before you start doing business, register as an LLC, corporation, or other recognized legal entity. Keep in mind that you may need to register with local, state, and federal organizations.
You may also want to apply for a DBA (Doing Business As) if your business will be operating under something other than your personal name.
If you’re unsure which legal entity to choose or where you need to register, consult with an attorney and an accountant to determine the best business structure and registration process for your specific situation.
Registering with the proper authorities demonstrates to the credit card companies that you’re serious about what you’re doing. It also introduces a level of formality and credibility that you can’t get anywhere else.
Open A Business Bank Account
A business bank account helps keep business and personal spending separate. This is an excellent way to demonstrate clear business financial activity.
It also makes tracking and reporting business taxes easier because you don’t have to go through every transaction to separate personal and business spending.
Maintain A Professional Online Presence
Though not absolutely necessary, maintaining a professional online presence adds a level of legitimacy to your business.
Consider creating a business email address, building a website, and filling out profiles on LinkedIn, the Better Business Bureau, and your local and state Chambers of Commerce (just to name a few).
You can also register/list your business with industry-specific organizations and websites to add to your online presence.
Maintain Accurate Business Records
Accurate business records are a crucial part of financial reporting that’s required for getting a business credit card with an EIN only.
Maintain clean, clear, and understandable records for every aspect of your business, including income, expenses, and contracts. Good organization also makes it easier to report your taxes at the end of each year.
Establish Accounts With Vendors
Maintaining good working relationships with vendors can also help build your credit. Start by establishing Net-30 accounts with frequently used suppliers and vendors. Then do your best to pay those bills on time every time.
If possible, encourage those vendor partners to report your payment information to one or more of the credit reporting agencies (e.g., Equifax, Experian, Dun & Bradstreet, FICO, etc.).
Consistently Pay Your Bills On Time
Building a good business credit score and credit history is all about paying your bills on time month after month. Doing so shows the credit card companies that you’re reliable and that they’re taking on a low risk when loaning you money.
Look For Corporate Cards That Don’t Require Your SSN
Corporate cards typically don’t require a personal guarantee (e.g., your personal credit history). Instead, approval is based largely on your business’s financial track record.
So, while you may not be able to get a business credit card with an EIN only right away, with good financial behavior, you’ll be better positioned to do so six months to a year after you get started.
Monitor Your Credit Report
Corporate credit card companies typically look at your business’s credit score and credit report during the application process.
To make sure you present well to those lenders, monitor your business credit report and address any discrepancies or errors right away.
A Corporate Card For Fleet, Fuel, And Beyond
To get started on the road to good business credit, apply for a corporate smart card from Coast.
Coast requires more than your EIN. When applying, we ask you to provide the last 4 digits of your Social Security number to comply with applicable laws and regulations, to help us to verify the identity of individuals associated with your business, and, where applicable, to help us access consumer credit reports.
We don’t require a personal guarantee, so there won’t be any impact on your personal credit score. We only ask you to provide your personal identifying information as well as basic information about your business.
In some cases, we may ask you to submit additional documentation, such as government-issued identification, bank statements, or accounting records to verify the information you provide in the application.
We’ve streamlined the process to make it as quick and seamless as possible. In fact, it only takes a few minutes to complete the application.
Once done, your business will be able to consolidate all of its spending into a single, easy-to-use program while still giving employees the flexibility to purchase anything they need to get the job done.
The Coast corporate card doesn’t just help you manage expenses; it helps you take control of them. To learn more about how Coast can help your company, visit CoastPay.com today.
Frequently Asked Questions [FAQs]
How long does it take to build credit with only an EIN?
When you first receive an EIN, the credit score attached to that number starts at zero (or close to it). But, by practicing good financial behavior, you can build that score to a strong number that can open many doors.
It typically takes three to six months of consistent on-time payments for an initial score to register with the reporting agencies. Building a strong score can take anywhere from six to 12 months or longer depending on your business’s financial behavior, industry, cash flow, and more.
Can I apply for a business credit card with no revenue?
Yes, you can apply for a business credit card even if your business has no revenue yet. That said, you’ll likely need to provide personal income numbers to support your application.
Providing your personal income gives credit card companies a better idea of your ability to repay any debt you take on, especially if your business hasn’t generated any income yet.
If you have limited or no credit history, you still have options. You may consider applying for secured business credit. These cards require a cash deposit that serves as collateral for whatever credit limit the company grants you.
What business credit score should I try to get?
While personal credit is scored on a scale of 300 to 850, business credit scores typically fall between one and 100. The higher the number, the better the credit score.
Make it your goal to exhibit good financial behavior in order to reach a score of 75 or higher. High numbers make it easier to access lower interest rates, higher credit limits, and better payment terms.
