What is a DUNS Number Used For?
If you ever plan on seeking small business financing, entering into partnerships, or simply establishing your company financially, a DUNS number can help you make a major impact. However, some startup founders may struggle with the exact meaning of this term or the relevance to their operations.
So if you have ever wondered “what is a DUNS number used for?” or why you need a DUNS number, we have answers. Read on for a full explanation.
What is a DUNS Number?
A DUNS number is a unique number used in identifying a business. It has become the universal standard for tracking businesses and their financial transactions throughout the world. Getting a DUNS means your business has been validated by Dun & Bradstreet, one of the top credit reporting agencies. So it provides credibility to your brand and allows your team and others who may want to do business with you to easily gain more information such as your business credit.
A DUNS is a nine-digit number and once your business is assigned it, the number doesn’t change throughout the life of your business. Basically, the number is just used as a unique identifier for your company when creditors, vendors, or potential partners want to find more information. It is like a social security number for your business credit or financial information.
The term D-U-N-S number stands for data universal numbering system. In addition to identifying your business, your DUNS number also gets linked to your business credit report from Dun & Bradstreet. Upon registering, you’ll receive a copy of your PAYDEX score, which is Dun & Bradstreet’s credit scoring system that is designed to tell creditors how likely you are to make payments on time. This is similar to your personal credit FICO score, except it is for your business credit worthiness. The score ranges from 0 to 100, with anything between 0 and 49 indicating a significant amount of risk, 50 to 79 indicating moderate risk, and 80 to 100 indicating low risk.
How Do You get a DUNS Number?
You get a DUNS number from Dun & Bradstreet, and they offer this option to businesses for free. The site walks you through the process and just asks for some basic information about your business.
The first step is to check and make sure your business doesn’t already have one. Anyone can check a DUNS number for a business. Use the DUNS lookup number tool.
If you don’t find anything the next step is to apply. You will need the following information to apply:
- Business name
- Business address
- Phone number
- Business owner’s name
- Year founded
- Legal business structure
- Number of employees
How Much Does a DUNS Number Cost?
A DUNS number is free. It costs nothing to apply for and get a DUNS number. However, the free process could take a month. But if you are in a hurry you can pay to get your new DUNS number faster. Dun & Bradstreet offers several options, including:
- Free DUNS process — this can take 30 days. You apply online and your DUNS gets mailed to you.
- $229 Expedited package — you get a DUNS within 5 business days. You also get a credit file with it.
- Federal government contractors — you can get a DUNS for free within one day. Apply through the government contracting DUNS form.
Is a D-U-N-S Number the Same as an EIN?
No, the two are different.
Your EIN, which stands for Employer Identification Number, is a tax ID issued by the Internal Revenue Service. The EIN is used for identifying the tax accounts of employers and other businesses. Additionally, businesses with a number of employees or those registered as C corporations, partnerships, and LLCs are required to have them by the federal government.
Your DUNS, on the other hand, is a number that identifies your business for purposes of credit reporting and tracking your financial and payment history. It’s not required for businesses to register for a duns number. It’s simply a universal numbering system that is widely used throughout the world.
Why Do You Need a DUNS Number?
You need a DUNS number because it is required for receiving your business credit report from Dun & Bradstreet and for applying for any grants or cooperatives from the federal government. It’s also very useful for obtaining financing for your business, entering into vendor contracts, or forming partnerships with other businesses.
7 Things You Can Do With a DUNS Number
Small business owners will want to get a DUNS number because it helps them obtain business financing and opens the door to new business opportunities. Here is a list of 7 things you can do with a DUNS number:
1. Establish Business Credit
Just as you need to establish a personal credit history to get approved for loans or credit cards, you need to build credit for your business. A D-U-N-S number is the first step in that process. Once you establish this number, the financial transactions your business makes will contribute to building that history and establishing credibility for your business.
2. Track Your Credit Report
Your credit report isn’t just helpful when you apply for a loan. It can also help you ensure your business information is accurate. With a data universal numbering system like DUNS, you can easily access updated information about your company and correct any errors before they negatively impact your business.
3. Obtain Financing
Once you establish a positive credit score for your business thanks to your D-U-N-S number, you can start applying for loans, credit cards, and other types of financing to move your company forward. This isn’t necessarily a requirement, and there are other credit reporting agencies. But DUNS is a universally recognized numbering system that is often helpful, if not required, in these transactions.
4.Apply for Government Contracts
The federal government requires that contractors and anyone applying for federal grants have a DUNS number. You get your application fast-tracked when applying for this purpose specifically.
5.Appeal to Potential Partners
Any business or individual can look up a company’s credit score using their D-U-N-S number. So it’s a popular solution for companies that want to make sure their partners and clients are financially stable and credible before signing agreements.
Apple requires that iOS developers use a DUNS number when creating their account with the App Store. This basically just standardizes the process of signing up and submitting apps.
7.Register as a Supplier
Many major retailers require their suppliers to have a D-U-N-S number. When you register to supply goods to these companies, having this number makes it easier for them to find standardized information about your company.
8.Apply for SSL Certificate
An SSL certificate is a credential that allows companies to make their websites more secure. A D U N S number isn’t a requirement to apply, but it can speed the process along by providing credible information quickly.
Source: Small Business Trends