Whether you need an EIN for a business credit card depends on how your business is set up. Sole proprietors and single-member LLCs with no employees can usually apply using a Social Security Number alone. Corporations, partnerships, multi-member LLCs, and any business with employees have to use an Employer Identification Number, because the IRS already requires them to have one.1Internal Revenue Service. Employer Identification Number Either way, expect the issuer to ask for your SSN too.
When You Must Have an EIN
The IRS requires certain business types to obtain an EIN regardless of whether they’re applying for credit: corporations, partnerships, and any business that hires employees.1Internal Revenue Service. Employer Identification Number Multi-member LLCs fall in this group too, because the IRS treats them as partnerships by default.
These entities are separate taxpayers from their owners, so a card issuer uses the EIN to verify the business exists, check its record with commercial credit bureaus, and confirm its standing with the IRS. Submitting an application for one of these entity types without an EIN will almost certainly be denied before a human reviews it.
When Your SSN Is Enough
If you run a sole proprietorship, or you own a single-member LLC that hasn’t elected corporate tax treatment, the IRS treats your business as a “disregarded entity.” You and your business are the same taxpayer for federal income tax purposes, and you generally use your own SSN for tax reporting.2Internal Revenue Service. Single Member Limited Liability Companies Card issuers recognize that classification and will accept your SSN as the primary business identifier on the application.
There is one important exception. Even a sole proprietorship or single-member LLC needs an EIN if it has employees or owes certain excise taxes.2Internal Revenue Service. Single Member Limited Liability Companies A disregarded entity without employees and without excise tax obligations doesn’t need an EIN at all for federal tax purposes, and can apply for a card using the owner’s name and SSN.
Why Issuers Still Ask for Your SSN
Having an EIN doesn’t let you skip the SSN field. Banks require both.3Chase. How to Get a Business Credit Card With No SSN The EIN identifies the business; the SSN identifies you.
Issuers use your SSN for three things the EIN can’t do. It verifies your identity under Bank Secrecy Act and Know Your Customer rules, which apply regardless of business structure. It lets the bank pull your personal credit report, because business credit history alone is rarely enough for approval. And it lets the issuer report account activity to credit bureaus and enforce the personal guarantee that comes with almost every small business card.
The Personal Guarantee
Nearly every small business credit card requires a personal guarantee, whether you apply with an EIN, an SSN, or both. A personal guarantee makes you personally responsible for the balance if the business can’t pay. The liability protection that comes with forming an LLC or corporation doesn’t extend to debts you’ve personally guaranteed.
This is issuer policy rather than federal law, but it’s effectively universal for small business cards at major banks. Plan on signing one no matter how the business is organized.
What the Application Asks For
Having everything on hand before you start keeps the session from timing out. Most issuers ask for:
- Your business’s legal name, matching what’s registered with your state (or your own legal name if you’re a sole proprietor with no registered business name)
- A physical business address; most issuers won’t accept a P.O. box as the primary location
- Your EIN if you have one, and your personal SSN in every case
- Annual business revenue for the past year, and personal income reported separately
- Years in operation, even if the business has run informally
- Industry type, usually chosen from a dropdown
If the business hasn’t generated revenue yet, you can typically enter $0 for business revenue as long as you report personal income elsewhere. Issuers use personal income, which can include wages from a job or a spouse’s income, to decide approval and set the credit limit. Some issuers may accept sales projections from a new business, but confirm that with the issuer before entering projected figures. Misrepresenting revenue on a credit application is illegal.
Getting an EIN if You Want One
Even sole proprietors who aren’t required to have an EIN often get one anyway. Using an EIN on vendor forms, invoices, and business accounts means fewer parties see your SSN, which reduces identity theft exposure. It also lets you begin building a credit profile under the business rather than under your personal record.
The IRS issues EINs at no charge and warns applicants about third-party sites that charge fees for what is a free government service.4Internal Revenue Service. Get an Employer Identification Number The fastest route is the online application at IRS.gov/EIN. You answer questions about the business and, if approved, get your EIN at the end of the session. You can view, print, and save the assignment notice right away. The application has to be completed in one sitting; it expires after 15 minutes of inactivity, and you have to start over.5Internal Revenue Service. Instructions for Form SS-4
If you can’t use the online tool, you can apply by fax or mail using Form SS-4. Fax typically returns an EIN within four business days. Mail takes four to five weeks.5Internal Revenue Service. Instructions for Form SS-4
How the Card Shows Up on Your Credit
Applying triggers a hard inquiry on your personal credit report, which can cause a small, temporary dip in your score. The inquiry stays visible to lenders for two years, though the score effect fades within about a year.6Chase. Does a Business Credit Card Impact My Personal Credit Score?
What happens after approval varies by issuer. Some report business card activity, including balances, payments, and utilization, to the consumer credit bureaus (Equifax, Experian, and TransUnion), so it affects your personal credit score the same way a personal card would. Others report only to commercial credit bureaus and keep the account off your personal report. A third group reports only negative information, like late payments, to consumer bureaus.7Experian. Will Your Business Credit Card Show Up on Your Personal Credit Report? Ask the issuer which policy applies before you apply, because a high balance on a card that reports to consumer bureaus could push up your personal utilization ratio even when the business is paying on time.