Applying for a credit card is usually straightforward. First, you gather the necessary information and then apply for your desired card. But what about applying for a business credit card when you don’t want to provide a personal guarantee to your company and be left at risk? An Employer Identification Number (EIN) protects your personal assets while giving issuers an idea of your business’s credit health. But can you apply for a business credit card with only an EIN?
At a Glance
- An EIN acts as a tax identification marker by the IRS. An EIN is comparable to a Social Security Number for companies.
- Many banks require a SSN to act as a personal guarantee for the businesses’ line of credit.
- Businesses can apply for a credit card with only an EIN, but the options are limited.
How to Apply for a Business Credit Card
When you apply, your Social Security Number acts as your identification and gives the lender access to your credit report to gauge your suitability for the credit card product. But what if you are a company without a U.S. location, you’re a foreign citizen, or you just don’t want to leave yourself financially exposed to your company’s potential debts? In these cases, an EIN can help you obtain credit for your business.
First, a quick primer. Here’s the step-by-step process for applying for a business credit card:
|① The legal name and contact address of your business||Even if you don’t provide your personal information, you will need to provide all relevant contact information for your business, including the company’s legal name, any names your company is doing business under, and the mailing and phone contact information.|
|② Basic information about your business||Most banks and lenders want to know some basic facts about your company. These facts include your industry type, the structure of your company and number of employees, and your annual revenue.|
|③ Tax ID number||
Most business card applications require a tax ID number, which is the number the IRS uses to designate your company when you file your taxes.
Many sole proprietorships have no employees – and never plan to hire additional help. Still, business credit card applications often ask for an Employer Identification Number (EIN). An EIN is basically an SSN for a business – it is the same as a tax ID. If you are a freelancer, tutor, run an online shop, or run some other solo venture, chances are you won’t need your EIN or tax ID. The IRS stipulates that an EIN is only necessary for those companies that:
|④ Estimated monthly spend on the card||Lenders want to ensure that your business’ finances aren’t stretched too thin, so expect to answer basic questions about how much you – and your employees – typically place on credit cards each month.|
|⑤ Personal credit history||If you need to provide a personal guarantee, expect to provide all relevant credit information for the primary account holder. This information includes full legal name, home contact information (phone number, mailing address, e-mail), and your Social Security Number.|
What is an EIN Number?
An Employer Identification Number (EIN) is a unique nine-digit identifier that the Internal Revenue Service (IRS) assigns to document business entities for tax purposes. It is a business equivalent of a Social Security Number and is essential for businesses, partnerships, corporations, estates, trusts, and other entities. An EIN also protects your personal assets from the liabilities of your business.
Any business entity that operates as a sole proprietorship, corporation, partnership, or limited liability company (LLC) generally requires an EIN. However, there are some exceptions. Consult the IRS guidelines or a tax professional to determine if your business needs an EIN.
Why EINs are Helpful
Why do you need an EIN for a business credit card? Financial institutions typically require a business to have an EIN when applying for a business credit card as it allows them to verify your business’s identity and separate your personal and business finances. Your company also needs an EIN if you have employees, file and withhold certain taxes on your business return, and operate as either a corporation or partnership.
How to Obtain an EIN
Companies can obtain an EIN by contacting the IRS and applying in one of four ways:
- Online on the IRS’ dedicated website,
- Via fax by sending a completed Form SS-4:
- Fax 1-855-641-6935 if your company is located in any of the 50 U.S. states or District of Columbia, or
- Fax 1-855-215-1627 (within the U.S.) or 1-304-707-9471 (outside the U.S.) if you have no legal residence, principal place of business, or principal office or agency in any state, or
- Via mail by sending a completed Form SS-4, or
- By calling 1-267-941-1099 (non-toll-free) and providing information from the SS-4
|The IRS provides the following information regarding the application process for an Employer Identification Number (EIN):|
|Determining Your Eligibility||You may apply for an EIN online if your principal business is located in the United States or U.S. Territories.|
|The person applying online must have a valid Taxpayer Identification Number (SSN, ITIN, EIN).|
|Fill Out the Application||You must complete this application in one session, as you will not be able to save and return at a later time.|
|Your session will expire after 15 minutes of inactivity, and you will need to start over.|
|Submit Application||After all validations are done you will get your EIN immediately upon completion. You can then download, save, and print your EIN confirmation notice.|
Can You Get a Business Credit Card with Just an EIN?
So, can you get a business credit card with only an EIN? Yes, but your options may be limited. Realistically, only having an EIN limits companies to two distinct types of credit card products: corporate cards and secured credit cards.
Secured and business cards for poor credit are rare, but a few examples are available for application. Remember, however, that applying for a secured credit card for your company requires either a Social Security Number or Individual Taxpayer Identification number.
The other type of credit available to companies with only an EIN is a corporate card. These are cards where the business entity, rather than the business owner, is legally responsible for any charges made with the card. As the name implies, corporate cards are typically available to large corporations with an established credit history and millions of dollars in revenue.
So, what are your options regarding corporate cards – especially if your revenue isn’t at the Fortune 500 level yet? The Brex Mastercard, BILL Divvy Corporate Card, and Ramp Card are three popular options. Here’s how they compare:
|Rewards||Earn unlimited 1.5% cash back on every purchase||Earn 7X points on rideshares, 4X through Brex Travel, 3X on dining, 2X on recurring software, and 1X on all other purchases||Earn up to 7X points on dining, 6X on hotels, 2X on recurring software, and 1.5X on all other purchases with weekly payments (see review for full details)|
|Designed for SMBs?||Yes||No||Yes|
FAQs About Employer Identification Numbers (EINs)
Still have questions about Employer Identification Numbers? Here are some commonly asked questions regarding EINs, and the answers:
Your EIN is a useful number that can be used for many business needs, such as opening deposit accounts, obtaining business permits and licenses, or filing tax returns.
If you misplace or forget your EIN, call the IRS Business & Specialty Tax Line at 1-800-829-4933.
Unfortunately, no. The easiest way to find your EIN is by looking at your business documents from the IRS or calling the above number.
The EIN is a 9-digit number, with a dash separating the first two digits: XX-XXXXXXX. The EIN is located in “Box B” of the W-2 form, right above the employer’s name and address.
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