5 things a DUNS number helps you do

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 helpful steps and can help you establish your business credit, as well as give you some extra perks you might not know about.

If you’re wondering, “What is a DUNS number?” and “What can I use my DUNS number for?,” this article will tell you what you need to know.

What Is a DUNS number?

The DUNS number, which stands for Data Universal Numbering System, is a unique nine-digit identifier assigned to businesses and organizations by Dun & Bradstreet (D&B). 

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 business credit with business credit reporting agencies by opening accounts that then are associated with your business.

Unlike personal credit, you may have to do a little legwork to set up a business 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.

But with all of that being said, what if you don’t have a DUNS number? Let’s learn if you’re missing out on anything by not having said identification. We’ll help you understand why obtaining a DUNS number can be very important for the growth of your business.

What does “DUNS” stand for?

DUNS stands for Data Universal Numbering System. It’s a unique nine-digit identifier assigned to businesses and organizations by Dun & Bradstreet, a commercial data and analytics company. The DUNS number is used as a standard business identifier and is widely used by various entities, including government agencies, financial institutions, and other businesses, to track and identify businesses in their databases.

Having a DUNS number is particularly important for businesses that wish to engage in government contracting, apply for federal grants, or apply for small business loans like lines of credit, as it is often a requirement for such processes. The DUNS number system helps maintain accurate and reliable information about businesses in the global marketplace.

Does a small business need a DUNS number?

In some cases, a small business may not necessarily need a Dun & Bradstreet number. However, there are specific situations where having a DUNS number can be beneficial. Here are some scenarios where a small business might consider obtaining a DUNS number:

1. Building business credit: Having a DUNS number can help establish and build your business’s credit. This is important if you want to separate your personal credit from your business credit file and build a strong credit history and business credit scores — or if you plan to apply for business funding. There are other ways to build your business credit history, like Nav Prime.
2. Applying for government contracts: A DUNS number is typically required if your small business intends to bid on government contracts or grants. Many government agencies use the DUNS number in their registration and procurement processes.
3. Applying for federal funding: If you plan to apply for federal funding or assistance programs, such as grants or loans, some agencies may require a DUNS number as part of the application process.
4. Engaging in international trade: If your small business takes part in international trade, having a DUNS number can be beneficial, as it helps other businesses and organizations identify and verify your company’s credibility.

It’s essential to check the specific requirements of the entities you intend to work with to determine whether a DUNS number is necessary. 

If you find that getting a DUNS number is helpful for your small business, you can request one from Dun and Bradstreet free of charge. You can also do a DUNS number lookup to see if your business had one created automatically. Learn more about how to get a DUNS number in this Nav guide.

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, 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, 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 and 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.

What about the UEI?

What is a UEI? “UEI” stands for Unique Entity Identifier. It’s a specialized identifier assigned to companies that do business with the U.S. federal government. The UEI system was introduced as part of the U.S. government’s efforts to improve the accuracy and consistency of data in federal procurement and financial assistance systems.

The UEI is similar in concept to the DUNS number, but it serves a different purpose. While the DUNS number is provided by Dun & Bradstreet and is widely used by various organizations, the UEI is specific to the U.S. government’s use.

The System for Award Management (SAM) manages the assignment and usage of UEIs. Entities that wish to conduct business with the U.S. federal government, including those applying for grants or contracts, may be required to obtain a UEI.

FAQs

Can I apply for a business loan with my DUNS number only?

While having a DUNS number can be helpful for your business, it typically can’t be used as the sole requirement to apply for a business loan. Business loan applications are comprehensive and involve various factors that lenders consider before approving a loan. The DUNS number is primarily used for credit reporting and business identification purposes, but it isn’t a credit score or a measure of financial health on its own.

Can I apply for a business credit card with my DUNS number only?

No, you can’t apply for business credit cards with just your DUNS number. Like applying for a business loan, when you apply for a business credit card, the issuing bank or financial institution will consider various factors to evaluate your creditworthiness and assess the risk associated with extending credit to your business.

Can I establish credit with my DUNS number?

Yes, business owners and entrepreneurs can establish credit with their DUNS number. The DUNS number is widely recognized as a unique identifier for businesses, and it’s used by business credit bureaus and other organizations to track and report business credit activity.

How is a DUNS number different from an employer identification number (EIN)?

A DUNS number and an EIN are two different types of identifiers used for distinct purposes in the business world. A DUNS number is used for business identification, credit reporting, and tracking purposes by various entities. An EIN is primarily used for tax purposes and as a tax ID, such as filing tax returns, reporting employment taxes, and identifying businesses to the IRS.