If you have gone through the hassles of incorporating your business, separating your personal affairs from your business affairs (which includes having both personal and business bank accounts), then you know that creating a new business entity has a decent amount of paperwork that comes with it. Getting your DUNS number is one of those essential steps and can help you establish your business credit, as well as give you some extra perks you might not know about.
With personal credit scores, your Social Security number and other personal identifying information serves as a way for credit reporting agencies to create a credit history for you. Lenders, credit card companies and other data furnishers send your credit information to the credit bureaus, who then pull that data when a credit check is being requested. Just like a personal credit profile, you have to establish a business credit history with business credit reporting agencies by opening accounts that then are associated with your business.
But, unlike personal credit, you have to may have do a little legwork to set up that credit history. Specifically, you may need to obtain a DUNS number, which essentially acts like your business’s Social Security number in Dun & Bradstreet’s database. Some businesses set this up on their own, but sometimes the credit reporting agency will assign you one when it starts receiving information about your business. You can check to see if you already have a DUNS number (or sign up for one) with a free Nav account.
But with all of that being said, what if you don’t have a DUNS number? What are you missing out on by not having said identification? Here, I’ll shed some light on some of the perks you might be missing and why obtaining a DUNS number can be very important for the growth of your business.
1. Get Government Grants & Loans
In many cases, not having a DUNS number will make it difficult to apply for (and win) government contracts for your business. Similarly, applying and getting approved for Small Business Administration (SBA) loans is easier with a DUNS number. The most popular SBA loan program — 7(a) loans — use a specific credit score (the FICO SBSS score) to qualify applicants, and a DUNS number can help ensure all the information on your credit report appears accurately when you go to apply. By being blocked from these vital government resources, it could hurt the growth, development and sustainability of your operations.
2. Establish Credibility With Business Partners
Having a DUNS number puts you in a global D&B database of businesses. D&B routinely updates these files and makes sure they’re accurate. The level of detail allows other members of the D&B system to see your organization as a part of a larger “credible” listing of businesses, which helps said members come to favorable terms in extending you financing offers, trade credit and more.
3. Get Special Discounts From Suppliers
Once again, having a DUNS number puts you in a global D&B database of businesses and this could lead to discounts from vendors/suppliers if they see you are a part of large corporate directories, or a part of other notable industries. This obviously means cost savings that go right to your bottom line.
4. Keep Your Personal Credit Separate
Without a business credit profile and DUNS number, you may need to rely on your personal credit for certain financing options. Not only could that do damage to your personal credit if you make a late payment or default on a loan, it could also hurt your debt-to-income ratios if you have a business credit card that’s maxed out, potentially barring you from getting approved for other types of personal financing products.
By having a separate business credit profile with a DUNS number, along with working with companies that report to said business credit agencies, you will be able to have said business financing listed on your business credit report. This would free up your personal credit report from the “weight” of having large forms of business financing listed.
5. Register for Applications & Certificates
There are particular applications (such as those from Apple) that might require a DUNS number for your business to register them. Not being able to register particular applications could lead to growth issues, marketing issues, customer communication issues, and other issues related to not being able to properly utilize available forms of innovative technologies. In addition, you might be seeking to register SSL certificates and having a DUNS number could help to speed up the registration process.