Do I Need A Duns Number For My LLC? Free Guide 2023

Small businesses often choose to form an LLC (Limited Liability Company) due to its benefits, such as liability protection, tax flexibility, simplified management, and enhanced credibility in the eyes of customers and partners. A Data Universal Numbering System (D U N S number) can be used by a number of different for profit and non profit businesses. While obtaining a DUNS number is not mandatory for all LLCs, it can be beneficial for establishing business credit, bidding on government contracts, and building credibility with suppliers and banks.

Business credit refers to the creditworthiness of a business entity separate from its owners or individuals associated with it. It is based on the business’s financial history, payment patterns, and overall creditworthiness. Business credit is used by lenders, suppliers, and other entities to assess the risk of extending credit or doing business with the company. A strong business credit profile can help a company secure favorable loan terms, obtain higher credit limits, and establish trust and credibility in the marketplace.

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What is a Duns Number?

A DUNS number is a unique nine digit number assigned by Dun & Bradstreet (D&B) to identify and track businesses globally. The unique entity identifier, or D U N S number, is commonly used to establish business credit file, participate in government contracting, and facilitate business transactions and partnerships. It can take several business days to obtain the number, so allow for time to apply and receive the number.

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What is a Data Universal Numbering System Number Used for?

A D U N S number is  used by a variety of entities, including other businesses, government agencies, financial institutions, suppliers, vendors, and trade associations. Some common use cases for D U N S number include establishing business credit history, participating in certain government contracts, conducting international trade, verifying business information, and facilitating business-to-business transactions. The General Services Administration (GSA) is an independent agency of the United States government. Its primary role is to manage and support the basic functioning of federal agencies. While not all government or financial entities require a DUNS number, the GSA does have this requirement.

Create Business Credit History

To build business credit history, establish a separate legal entity, such as a sole proprietorship or LLC for the company registered for the bradstreet number. Obtain an EIN, open a business bank account, and apply for a business credit card. Do not use personal credit for this, and ensure you have a separate physical address. A D U N S number helps with building a business credit file by providing a unique identifier for your business even if you operate in multiple locations. One major factor is it allows credit bureau reporting agencies, financial institutions, and lenders to track and assess your creditworthiness. Having a D U N S number can help establish business credit, improve credibility not only with potential customers but for a business loan application, and provide a standardized way for banks to evaluate your creditworthiness.

Provide Access to Contracts from Federal Government

A D U N S number is a requirement for any business owner seeking to do business with the federal government. It is used to identify and track entities throughout the contracting process. Having a D U N S number is typically a prerequisite for registering in the System for Award Management (SAM) and bidding on federal contracts. It helps streamline the government contracting process and ensures accurate identification and verification of businesses.

Obtain Financing

A D U N S number can help in obtaining business financing by providing a standardized and recognized identifier for your business. Lenders, especially those specializing in business loans, often use the D U N S number to assess the creditworthiness and financial stability of a company. A strong credit profile associated with your D U N S number can improve your chances of securing favorable loan terms and higher credit limits. It helps banks evaluate your business’s credit history, payment patterns, and overall financial health, making it an important factor in the loan application process.

Register as a Supplier

While the specific requirements may vary depending on the entity you wish to register as a supplier with, having a D U N S number can be beneficial in many cases. Some organizations, particularly larger corporations and government agencies, may require suppliers to have a D U N S number as part of their registration process. The D U N S number helps establish the credibility and legitimacy of your business, which can enhance your chances of being approved as a supplier. However, it’s always best to check the specific registration requirements of the organization you are interested in working with to determine if a D U N S number is mandatory.

Why Do I Need Duns Number for My LLC?

A D U N S number is beneficial for an LLC as it can help establish business credit, participate in federal government contracts, and enhance credibility with suppliers and banks. You can get a DUNS number quickly, usually within a few business days, or choose expedited service for closer deadlines.

Allows You To Verify Your Business Identity

A D U N S number does not directly verify your company’s information; instead, it serves as a unique identifier for your business in Dun & Bradstreet’s database. Verification of your business typically involves providing supporting documentation and meeting specific criteria set by the verifying entity, such as government agencies or credit reporting agencies. The D U N S number can be used as a reference point to access and verify information about your business in Dun & Bradstreet’s database, which may include details like company name, address, and financial information. However, the actual verification process depends on the requirements and procedures of the verifying entity.

Increase Your Business Creditworthiness

Getting a DUNS number can indirectly contribute to improving creditworthiness in the following ways:

• Establishing business credit: By obtaining a D U N S number and using it to establish credit accounts, make timely payments, and maintain a positive credit report history, you can build a strong SMB credit profile. A robust credit report history enhances your creditworthiness.
• Enhanced credibility: Many banks and suppliers recognize and rely on D U N S numbers to assess the legitimacy and credibility of a business. Having a D U N S number can instill confidence in potential lenders, suppliers, and partners, increasing your perceived creditworthiness.
• Standardized identification: The D U N S number provides a standardized and globally recognized identifier for your business. Lenders and credit agencies can access information associated with your D U N S number, which helps verify your business and evaluate its creditworthiness more easily.

Ultimately, a D U N S number can facilitate the processes and activities that contribute to building and demonstrating creditworthiness, such as establishing credit report history and establishing credibility.

Some Small /Business Grants Require a DUNS Number

The requirement of a D U N S number for grants can vary depending on the grant program and the organization offering the grant. In the past, many federal grant programs in the United States required a D U N S number as part of the application process. However, it’s important to note that grant requirements can change over time, and different grant programs may have different requirements. It’s best to carefully review the specific guidelines and instructions provided by the grant program or organization to determine if a D U N S number is necessary for the particular grant you are interested in applying for.

Building Your Business Credit Profile with a DUNS Number

Building your business profile using a D U N S number involves several steps. First, obtain a D U N S number from Dun & Bradstreet. Next, update your business information with accurate details. Establish trade credit with suppliers and make timely payments to build a positive credit report history. Monitor and manage your D&B SMB credit profile regularly to ensure its accuracy and showcase your business’s financial strength.

How to Apply for a DUNS Number?

First, visit the Dun & Bradstreet (D&B) website or call their customer service. You’ll provide your business’s legal name, address, contact information and answer questions about your industry, ownership structure, and operations. Then, you’ll verify your identity, submit the application, and wait for processing time. Once assigned, the DUNS number will be provided via email or mail.

Final Thoughts

Obtaining a D U N S number can be valuable for LLCs and businesses. It enables the establishment of credit, facilitates participation in government contracts, enhances credibility with suppliers and lenders, and provides a standardized identifier for business verification.

Frequently Asked Questions (FAQs)