In the world of business credit, EIN is a unique type of identification issued by the Internal Revenue Service. An EIN is a tax identification number that allows people to claim exemption on their income taxes. EIN numbers are also issued for the owners of many types of businesses including hotels, restaurants and corporations. While there are many reasons an individual might get an EIN, it's worth knowing that EINs are not tax liens.
Business credit cards that have an EIN attached to them allow business owners to obtain funding from the credit card issuing company. In return for the business credit card user putting his or her EIN number on the card, the business credit card company will issue payments based on the income reported on the business' Form 1040. The business credit card will show a monthly statement reflecting the amount of funds disbursed by the business to its suppliers. For many small business owners, this form of business credit is a lifesaver as it enables them to run their business without worrying about whether their suppliers will pay their bills. However, what most small business owners do not know is that EINs cannot be used for personal purchases. EIN numbers are for business use only.
Most EIN applications are processed fairly quickly and efficiently in most instances. However, there are some EIN problems that can occur if the application is submitted incorrectly. If you have applied for an EIN but your financial records do not meet the requirements needed by the IRS to process your business credit card, the IRS can deny your application. Here are some of the common mistakes you should avoid when applying for an EIN:
o Not completing the entire form correctly. Make sure to follow all the directions and provide any necessary documentation. An incomplete application can seriously delay processing times and even result in the denial of your business credit request. Remember, if the IRS thinks you are an irresponsible risk, they will take steps to prevent you from reaping any benefits from the exemption.
o Diligence in submitting your business credit card application. If you want to get the best possible deal on your business credit card, you need to work with the lender. Don't apply to more than one lender, because this will likely increase your risk. Always submit all business credit applications in the same condition and provide all necessary documents. If you are unable to meet the requirements for the EIN, your chances of approval will also be reduced.
If your business has been established for at least two years, you are eligible for a business credit card. The application process is usually quite simple. All you need to do is provide basic information, including the name of your business and the business' contact details. The lender will also require proof that your business qualifies for the credit. You can obtain a business credit card from any EIN-institute that specializes in issuing business credit cards. If you are . . . . . . approved, you will be given an account number and you can access the funds anytime you need them.