When applying for a business loan product, whether through a more traditional lender or an alternative lending source, your business will generally need to have what is called an employer identification number (EIN). This is essentially like a social security number but for a business. Not all businesses need an EIN; however, if you fall under one of the following categories then you will be required to get one:
- You have a corporation
- You have employees
- Yours is a multi-member LLC
- You wish to be taxed as a partnership or corp.
If on the other hand, your company does not fall under one of the above, then you can simply use your social security number when applying for a loan product. Keep in mind though that an EIN is free to obtain through the IRS. It can be done either via phone call or even using the IRS website.
Why Should You Get an EIN?
For one, having an EIN helps keep your personal information separate and thus less susceptible to identity theft. Frequently using your SSN for business can make you vulnerable to cyber attacks. The EIN also gives you a more credible leg to stand on as a business—in other words, you are essentially creating your business as its own entity, disparate from you personally.
At First Union, we’d love to sit down and discuss your financing needs. Whether applying with an EIN or SSN, we can help determine what would work best for your business and thus benefit the company the most over the long term. A streamlined application process and funding in as little as two days are why many smaller businesses turn to us first. Call today and let’s get started!
You’re reading part 18 of our 18-part series: 18 Business Loan Requirements.