How to Get a Business Credit Card with EIN Only
Business

How to Get a Business Credit Card with EIN Only

What is an EIN?

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An EIN (Employer Identification Number) is like a social security number for businesses and is used for tax reporting. It helps separate personal and business finances, reducing personal liability.

Businesses in good financial positions can benefit from an EIN as it enables them to apply for various financial products such as business credit cards. Using the company’s unique identifier, they can easily establish a strong credit record while keeping their personal and business finances separate.

How to Get an EIN

To obtain an Employer Identification Number (EIN) for your business, follow these steps:

  1. Determine Eligibility: Most businesses with employees, corporations, and partnerships are required to have an EIN.
  2. Fill Out the Online EIN Application: You can apply on the IRS website, by mail or fax by completing Form SS-4.
  3. Provide the Necessary Information About Your Business: Include the legal name, trade name, address, and the reason for applying for an EIN.
  4. Submit the Application: If applying online, you will receive your EIN immediately after completing the application. If applying by mail or fax, it may take up to four business days to receive your EIN.
  5. Keep a Record of Your EIN: You will need this number for tax purposes, opening a business bank account, and hiring employees.

How do Business Credit Cards work?

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Business credit cards are designed for business purchases and expenses, offering benefits tailored to small businesses. These benefits can include rewards on business-related spending, expense tracking tools, and higher credit limits than personal credit cards.

For example, a small business credit card may offer cashback rewards on office supply purchases or travel expenses. It can also provide detailed monthly statements that help businesses track their spending more efficiently.

Credit Limits and Application Process

The credit limits on business credit cards are based on the company’s credit record and financial standing, not the owner’s personal credit. A strong business credit history is crucial in obtaining higher credit limits and better card options.

When applying for a business credit card, some issuers may perform a soft check on the company’s credit history, focusing mainly on its payment history and overall financial health. This process helps determine the eligibility of the business for specific card offers.

Moreover, businesses with bad or no credit might consider secured business credit cards as an option. These cards require a cash deposit as collateral, which becomes the card’s available balance. They can be instrumental in helping businesses build or rebuild their credit while still enjoying the convenience of using a corporate card for transactions.

What are the Best Business Credit Cards with EIN Only?

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Major business credit card issuers offer options for obtaining a business credit card using only an Employer Identification Number (EIN). These cards are specifically designed for small businesses and entrepreneurs who want to separate their personal and business finances. Using the EIN allows business owners to establish a business credit record without relying on their personal credit reports.

For instance, companies like American Express, Chase, and Capital One provide business credit cards that require only an EIN for application. This means that even if the owner has no established personal credit history or is trying to keep their business expenses separate from their personal ones, they can still obtain a business credit card using just the EIN.

Corporate Cards with High Credit Limits

Businesses with strong, established credit records can access corporate credit cards offering high spending limits tailored to company needs. These cards enable larger purchases while providing valuable rewards programs and benefits suitable for corporate expenses such as travel accommodations or office supply purchases.

Some major banks offer corporate accounts where businesses can apply solely using their EINs rather than relying on individual guarantors’ good personal credit. The ability to secure substantial lines of credit based entirely on the strength and track record of one’s enterprise can significantly benefit companies seeking greater purchasing power without risking individual assets.

How do I get a Business Credit with EIN Only?

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Follow these steps to apply for a business credit card using only your EIN.

Step 1: Establish your business as a separate legal entity by obtaining an Employer Identification Number (EIN) from the IRS.

Step 2: Research and compare business credit card options to find the best fit for your company’s needs and financial situation.

Step 3: Prepare your business financial documents, such as tax returns, bank statements, and any other relevant financial records, to demonstrate the creditworthiness of your business.

Step 4: Complete the business credit card application, ensuring you provide your EIN instead of your Social Security number.

Step 5: Submit the application and any required documentation to the credit card issuer for review.

Step 6: Wait for the credit card issuer to process your application and make a decision. This may take a few weeks, so be patient.

Step 7: Once approved, carefully review the terms and conditions of the business credit card before using it to ensure you understand the interest rates, fees, and rewards associated with it.

Step 8: Use the business credit card responsibly to build your company’s credit history and take advantage of the benefits offered by the card.

What are the benefits of Business Credit Cards with EIN Only?

The company benefits from liability protection when obtaining a business credit card with EIN only. This means that the business owner’s personal assets are not at risk if the company fails to repay its debts. For example, if the business faces financial difficulties and cannot pay off its credit card debt, the owner’s business and personal finances remain separate and protected.

Business credit cards with EIN only guarantee this level of protection, ensuring that any debts incurred are tied solely to the business entity. This is a good option for entrepreneurs who want to shield their personal assets from potential business liabilities.

Small business credit cards that require only an EIN can help small businesses build a strong business credit profile. Small businesses can establish a positive credit record by using the card responsibly and making timely payments. This is crucial for future financing needs such as loans or additional lines of credit.

Obtaining a traditional business credit card might be challenging for entrepreneurs with less-than-stellar personal credit. However, secured business credit cards that rely solely on the company’s EIN present an opportunity to access funding despite poor personal credit scores.

A business credit card with EIN only also simplifies payment tracking by separating personal and business expenses. This separation streamlines accounting processes as it allows for clear identification of transactions directly linked to running the enterprise.

Another key benefit of obtaining a business credit card with EIN only is access to rewards programs tailored specifically for business expenses. These programs often provide cash back, travel rewards, or other perks based on spending categories relevant to operating a company.

For example, businesses may earn cash back on office supply purchases or receive travel points for booking flights related to work-related trips. By taking advantage of these rewards programs, companies can effectively reduce costs and maximize benefits associated with their regular expenses.

What are the drawbacks of Business Credit Cards with EIN Only?

Business owners applying for business credit cards using only their EIN may encounter lower credit limits. These restricted credit lines can hinder the ability to make substantial business purchases or cover significant expenses. For instance, if a small business owner needs to invest in new equipment or purchase a large inventory, the constrained credit limit might not suffice.

Secured business credit cards are an option for those facing this challenge. However, they often require a cash deposit as collateral. This means that funds get tied up and cannot be utilized for other essential aspects of the business, potentially restricting its growth and development.

For small business owners grappling with bad personal credit, securing favorable terms when applying for a company card solely based on their EIN can be difficult. Many traditional credit card companies favor applicants with excellent personal scores and robust financial histories.

As such, individuals who have faced financial hardships or made past mistakes might struggle to access suitable corporate cards without relying heavily on their personal standing or providing additional security, like personal guarantees or assets as collateral.

While EIN-only business credit cards offer limited liability protections, many credit card issuers still require a personal guarantee. This means the business owner is personally liable for any debt if the business defaults, effectively neutralizing limited liability protections.

Business Credit Card with EIN Only Pros & Cons

pros, and, cons

Pros:

  • Simplified application process.
  • Separation of personal and business finances.
  • Ability to build business credit history.
  • Limited liability protections for the business owner.
  • Simplifies payment tracking.
  • Access to business-focused rewards programs.

Cons:

  • Fewer credit card issuer options for EIN-only applications.
  • Might still require a personal guarantee, bypassing limited liability protections.
  • Most lenders prefer business owners with strong personal credit.
  • Higher interest rates and fees for some EIN-only business credit cards.
  • Might have fewer reward options than applying with an SSN.
  • Unable to build personal credit history with EIN-only business credit card.

Frequently Asked Questions

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Here are the most common questions about getting a business credit card with EIN only.

Does my business need an EIN?

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An EIN is crucial for tax reporting and makes your business eligible for a business credit card. It serves as the social security number for your company, allowing you to establish credit and apply for various financial products. Without an EIN, your business may face limitations.

When applying for a business credit card, having an EIN enables small business owners to separate their personal and business purchases effectively. This separation simplifies accounting processes and provides clear documentation of business expenses, making it easier during tax season.

Will applying for a Business Credit Card with my EIN impact my personal credit score?

Usually, applying for a business credit card using your EIN won’t affect your personal credit score. This is because the application only pulls credit reports from business credit bureaus, not personal credit bureaus. However, some credit card issuers may still do a soft pull of your personal credit report.

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Applying for a business credit card using only an EIN can help separate personal and business finances. By doing this, you can build a strong business credit profile, which is essential for your company’s financial health. This separation also makes tracking business expenses and managing cash flow easier.

When you use your EIN to apply for a business credit card, the card’s activity is reported to commercial credit bureaus rather than consumer credit bureaus, further solidifying your company’s financial standing. This distinction between personal and business finances is crucial for the long-term success of small businesses.

While some business card issuers may allow you to apply with just an EIN, they might still require a personal guarantee or conduct a soft credit check. A personal guarantee means that, as the business owner, you are personally liable for any debts incurred on the card if the company fails to make payments. On the other hand, a soft credit check involves reviewing your credit report without impacting your score.

It’s important to note that while applying with an EIN helps separate finances, there may be implications tied to individual liability or potential impacts on personal credit history due to these requirements. Therefore, it’s essential for small businesses considering this route to thoroughly understand all terms before proceeding with their application.

Can I improve my credit with a Business Credit Card?

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Obtaining a business credit card can be an effective strategy if you want to improve your business credit score. Using the card responsibly and making timely payments demonstrates your ability to manage finances effectively. This positive financial behavior is reported to business credit bureaus, which helps build a strong business credit record.

However, if you obtain a credit card using your EIN only, you won’t be able to build your personal credit. Since the credit card is tied to your business only and not your social security number, no credit card activity gets recorded in your personal credit history.

Can I get a business loan with an EIN?

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Getting a business loan using only your EIN can be challenging, especially if you’re looking for a lender that won’t check your personal credit. Many traditional lenders, such as banks, often require a personal credit check as part of the loan application process.

However, alternative lenders and online platforms specialize in providing business loans based solely on the business’s EIN and financial history. While these lenders may be more flexible regarding personal credit checks, they may have higher interest rates or stricter repayment terms. It’s essential to thoroughly research and compare different lenders to find the best option for your business.

Why won’t some Credit Card Issuers accept EIN-only applications?

Some credit card issuers may hesitate to approve business credit card applications using only an Employer Identification Number (EIN) due to the absence of a robust business credit history. They might require a personal guarantee because EIN-only applications lack the backing of an established business credit profile.

Certain lenders prioritize Social Security Number (SSN)-based applications for assessing an individual’s personal credit record, which is not applicable for EIN-only applicants. This approach allows them to evaluate the applicant’s financial responsibility based on their personal credit history, which isn’t available when applying with just an EIN.

Risk Perception and Eligibility Criteria

Business card issuers often perceive EIN-only applications as higher risk, leading them to impose stricter eligibility criteria and offer lower initial credit limits. Without an extensive business credit track record linked to the EIN, these issuers may be more cautious in extending significant lines of credit.

Can I apply for multiple Business Cards using different EINs for various ventures?

Yes, you can apply for multiple cards using different EINs if each entity is legitimate and separate from the others. This approach helps in managing finances efficiently across different ventures.

Can I get a Business Credit Card if I have bad credit?

Yes, getting a business credit card with bad credit is possible, but it may be more challenging. Some options include secured business credit cards, which require a security deposit that acts as collateral for the credit limit.

Another option is to become an authorized user on someone else’s business credit card to help build your credit. Additionally, some lenders may offer business credit cards specifically designed for those with bad credit, but these may come with higher interest rates and fees.

It’s important to carefully research and compare options to find the best fit for your business needs. Building and improving your credit over time can also increase your chances of qualifying for better business credit card offers.

Secured Business Credit Cards

Secured business credit cards can be an excellent option for small business owners with bad credit. These cards require a cash deposit that serves as collateral, making them more accessible to those with less-than-ideal credit scores. By using the company’s Employee Identification Number (EIN), entrepreneurs can secure a business credit card without relying solely on their personal credit history.

Soft Credit Check During Application Process

When applying for a business credit card, companies may undergo a soft inquiry into their credit profile instead of a full-scale review. A soft check does not impact one’s credit score, allowing small businesses with less-than-perfect credit profiles to explore various options without worrying about further damaging their credit standing.

How to Get a Business Credit Card with EIN Only – Final Thoughts

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Obtaining a business credit card with an EIN only is a viable option for small businesses and entrepreneurs looking to separate their personal and business expenses. Following the steps outlined in this article, you can apply for and potentially receive a business credit card using only your EIN.

It’s essential to carefully consider your business needs and financial situation before choosing a specific credit card, and always be sure to use your business credit responsibly to build a positive credit history. With the right approach, a business credit card can be a valuable tool for managing cash flow and growing your business.

Contact us if you have more questions about getting a business credit card with EIN only or to apply for a small business loan. Our alternative funding experts can help you find the best financing options for your business needs.