What is a DUNS number?
Obtaining a loan for your business has a very different process as compared to getting a personal loan. Even though the bank and other lenders just look at your credit history and your personal finances when reviewing your application for a loan, or other borrowings, they always look for much more details when it comes to business loans.
Well, every business has it own tracking numbers and credit score, which includes a very important number called the DUNS number. This guide would help you learn all about the DUNS number and why is it essential for your business.
What is a DUNS Number?
The very first thing to understand is the definition of the DUNS number and how does it work. DUNS means Data Universal Numbering System, which was started in the 1960s from the business data and analytics company called the Dun & Bradstreet. This company traces its roots back to the 1841 and today has about 300 million business records on file.
A DUNS number is made up of 9 digits and can be obtained from Dun & Bradstreet for free. Dun & Bradstreet is also referred to as the D&B. As soon as you apply for the DUNS number at the relevant site, you would get the issued number within 24 hours to 48 hours. Moreover, the number you get is not what matters, but how you use it is what matters.
Before you blindly apply for a DUNS number, it is better to check if your company already has it. You might have opened a credit card or borrowed one in the past, where you got the DUNS number and you did not know about it. Hence, it is better to search for it first and if you do not have the DUNS number, then it is safe to go ahead and apply for it.
Who can get a DUNS number?
As you have read above, the DUNS number is like the social security number for the businesses. But the number of DUNS numbers are much more than the Social Security numbers where any business around the world can apply for it and obtain it. In short, anyone can get the DUNS number. This includes:
- Self-employed individuals
- Government entities
Contractors, lawyers, and physicians who are self-employed professionals who are involved in a specific commercial business activity can also get the DUNS number. Hence, anyone who is involved in a business activity can get the number.
Who Uses a DUNS Number?
The DUNS number is utilized for more than just the credit reporting of the company, even though it is important to maintain a strong business credit score for your DUNS number. The DUNS number that you get for your corporation would be used by the credit agencies, government agencies and businesses to track and approve your request.
To understand better, here are some of the most important uses of the DUNS number:
- US Government – Every government contractor needs a DUNS number. So, if you want to do any sort of business with the federal government, you would need to get the DUNS number before submitting a bid or applying. That is not all; if you are looking for a business grant from the government, you would need DUNS number as well.
- Apple – In case you want to create an app for any of the Mac or iPhone users and sell it on the Apple’s coveted App Store, you would need a DUNS number for it. The size of your business does not matter; you need a valid DUNS number for listing your apps via Apple.
Other than these, there are many other users like the European Commission and many other organizations that need the DUNS number. One of the biggest benefits of the DUNS number is its wide-ranging uses for both government and business purposes. The European Union does not care about your EIN (U.S. Federal Employee ID Number), but it does care a lot about your DUNS number. Moreover, since they are free and are used for many purposes, it is better to sign up and get the DUNS number in case you might need it in the future.
Why do I need a DUNS number?
With the explanations above, you might have understood that many industries, as well as the government agencies, ask for the DUNS number. Well, the US Federal government uses the DUNS number to recognize companies and organizations doing business with the government.
Moreover, the government uses the DUNS number also to offer a consistent name and address data for its grant application systems. In short, if you want to apply for government grants or if you want to bid on government contracts, you need a DUNS number.
Getting the DUNS number is the very first step towards registering your company with the Federal government procurement systems. Here are the things that you normally need to do before you indulge into any contracts or deals with the US government:
- Get a DUNS number.
- Apply for the system for Award Management (SAM) registration.
- Grants.gov registration.
You would also need the DUNS number when you register with any of the Federal agency-specific grant modules like the NASA NSPIRE; the National Science Foundation FastLane; and the National Institutes of Health eRA Commons. So, it is very important to get your registration done; without which you would not be able to submit your application.
Essential Characteristics of a DUNS NUMBER
Each DUNS number has various essential characteristics:
- Global Use – The DUNS number is pervasive and global. In August 2013, there were about 225 million unique DUNS registered numbers from businesses all over the world (from 190 different countries). There isn’t any other business registry that has these many entries, even at the international level.
- Permanence – As soon as a DUNS number is issued, it is permanent, regardless of the moderations in the company’s domicile, ownership or even financial events like bankruptcy. In case a corporation liquidates and discontinues its operations, the DUNS number assigned to it would not be reissued to another company again.
- Compatibility With National Business Registries – A lot of governments use the DUNS number as the de facto business registry for any corporation that they are working with. For example, the Central Contractor Registration system of the United States utilizes the DUNS as the main method of business identification. This means that you need a DUNS number to apply for a contract with them.
In many other countries, the DUNS number is the only means of verifying the headquartered businesses in other countries, even if the company isn’t doing business with the local government. Even in Germany, there is a national business registry called the Unique Partner Identification Key (UPIK) which utilizes the DUNS number to sort out the businesses.
How do I get a DUNS number?
You can apply for the DUNS number via the Dun & Bradstreet website at https://www.dnb.com/ since it is free to do so. But there are specific Dun & Bradstreet paid business intelligence and credit monitoring packages like the Small Business Starter.
Other than this method, there is another way which is via the government iUpdate website at http://fedgov.dnb.com/webform. This is just another portal and you would need the same information. The only difference is that the process is a bit easier to apply here.
But before you go ahead to apply for the DUNS number, it is important to check if your company already has the DUNS number or not. It can be possible that the business already has a DUNS number if you have purchased the business from another business owner. To search for the DUNS number of your company, you can put your company’s name in the D&B’s online DUNS database or just call at (866) 705-5711 to ask a representative.
In case you do not have a DUNS number, you can easily request for it over the phone. The number shared above is the D&B’s number and you can talk to any of their representatives between 8:00 am and 6:00 pm, seven days a week and in all the US time zones. As soon as you submit the application, it can take up to 30 days for you to get the number. But if you choose a paid D&B plans, like the Small Business Starter, the speed of the process would increase, and you would get the number within just two days.
What information do I need for registering a DUNS number?
For applying and obtaining a DUNS number for your business, you would need the following information:
- Contact name and title.
- Telephone number.
- Mailing address, in case it is not the same as your physical address.
- Business physical address: street, city, state, zip.
- Your DBA (Doing Business As), in case your business is normally recognized by a different name than your legal business name.
- Business headquarters name and address.
- Number of employees at your physical location.
- Whether you are a home-based business.
After you have provided all the details, then Dun and Bradstreet would verify your company’s as well as your identity to safeguard the data of your organization. For the process, you would begin with a series of challenge questions that have to be answered based on your demographic and geographical data. As soon as you have passed these challenge questions, you would have to create your user ID and password.
As soon as you are done and the application has been submitted, it takes about one day to even five days for your application to be approved. As a matter of fact, it can also take longer, so it is advised not to wait for registering to get your DUNS number sooner.
What Can You Do With One?
Well, the DUNS number is not just good for getting loans and working with the government. There are a lot of uses of the information in the DUNS number that develops great opportunities for your business. It also helps you if other entities have the DUNS number that want to do business with you. Here are some of the uses of the DUNS number:
- Expedite Your Application for an SSL Certificate – In case your company wishes to put up an e-commerce portal, you would have to apply for the SSL certificate. This certificate is an essential security feature for any of the online transactions. The agencies that offer these kinds of certificates usually need out-and-out ownership, contact, and demographic information regarding the applicant.
With the DUNS number, the SSL issuer would be able to get all these information so that they can easily and quickly verify the identity of your company and activate the certificate. If you do not have a DUNS number, the SSL would need some information. And to get the details they need, they would request for a pack of emailed or even faxed documents. This would just, in turn, increase the complexity and length of the overall process.
- Get Better Information Regarding Prospects – In case you have a B2B business, your success is based entirely on how you determine the most promising prospects and eventually convert them into customers that pay. With the contact, financial, and demographic information for millions of companies, you would be able to find and reach the right firms through the DUNS database.
This would help you become successful faster since you would find out the right company that needs your products and services and strike your contract with them.
- Maintain Better Purchasing Power With Suppliers – It is obvious that you would have many suppliers for your business, and many of them might be operating under the same corporate parasol. But this does not mean that the relationship would always remain apparent. With the help of the DUNS number of each supplier, you would be able to dig out the hidden corporate relationships and even utilize them for your benefit as you negotiate your way into various supply contracts.
Let us take for example, instead of purchasing something from five different suppliers that are owned by the same parent company; you would be able to purchase five times as much from just one supplier. This would also help you to secure a bulk discount which would be given as a reward.
- Have Better Risk Management With Clients – In case your company extends the lines of credit it has to your client, and if they have a DUNS number (which should be the case), you would be able to understand the overall health of their credit history. Let us take an example; not all the parent companies of your clients are good even if the client’s company is financially sound.
To find out if the parent company is in trouble, the DUNS number is the only one that can save you by revealing the link between the two companies. This would save you from starting a contract that might abruptly stop in between and cause your company a loss.
- Establish Credibility With Lenders – As per the process of due diligence, the lenders from who you might be requesting for a loan for your business would always refer to your DUNS number. This would help them understand the basic financial and demographic information regarding your company. Moreover, it is with this DUNS number that they might also buy the business intelligence and credit reports of your business from Dun & Bradstreet.
All these information about your business would be a property of the Dun & Bradstreet, and it helps the lenders know all about your business history with sometimes. But if you do not have the DUNS number, the lenders would not be able to get all the information they want about your company. And this would make them decline your loan request which leaves a negative impact on the business financial history as well.
- Do Business With Foreign Companies – It is normal for companies to always do business with a foreign company at some point in their business life. And since the DUNS number is the de facto business registry in most of the countries in the world, it is vital to have one. It is one of the easiest ways to claim that you are legitimate and have the potential to have foreign clients.
In fact, it is vital to have a DUNS number if you are thinking of opening a subsidiary or branch in another country, as per the local government’s policy. So, it is better to have a DUNS number to be prepared for such situations.
- Work With Government Entities – From all the details shared in the beginning, you now know that you cannot apply for a contract with any government agency without the DUNS number. Even if it is for a grant, a loan or any other business contract, you need to have a DUNS number before you contact the government agency or any other agency to be on the safe side.
- Keep Accurate Business Data – Well, Dun & Bradstreet has declared many times that they spend more than $1 million on a day for maintaining the DUNS database. They ensure that the data is verified and updated for each entry.
This means that you can trust the DUNS entry for not only your company but any of the other companies you are about to business with and have a DUNS number. If you look for any of the other entries, they do not have a guarantee of accurate and up to date data, while DUNS database is always up to date.
What does a D&B Listing Mean?
Now that you know what a DUNS number is, let us understand what is a D&B listing so that you do not confuse it with the fact that your business has an established business credit report if you are listed on the DUNS database.
Being listed on the D&B database means that you are present on the list. This listing can be an incomplete one as well if there are no active trade lines that are being reported. And as per D&B, it is known as a marketing file and not a business credit report.
As soon as you get trade references in your file, the D&B gathers and verified the data as they put it in the file. This data is what is called the business credit report. And for a company to have a credit score with the Dun and Bradstreet, your company would need to have at least three trade references. The business credit rating that is developed after that is known as the Paydex Score.
Your DUNS number would be linked with the credit file of your company, which eventually plays a crucial part in the search for financing and credit for your company. Hence, it is with the DUNS number that creditors, suppliers, and credit report lenders would be able to judge the creditworthiness of your business.
Your DUNS Number & Business Credit
With the above details, you now know that Dun & Bradstreet does a lot more than just issue the DUNS number for your business. It is a complete credit reporting agency where it calculated your business credit score only after your business indulges in at least three transactions, just like TransUnion offers your personal credit score.
The Paydex score (credit score of your business) runs from a range of 1 to 100. To see the credit score, you can contact the D&B representative and find out about it. With this, you would be able to figure out if you would be able to secure a loan for your business with it.
The PAYDEX score fits into the equation which figures out your loan size, interest rates, and whether or not you get approved for the loan at all! In short, this would help you make or break a big decision for your business. Hence, the DUNS number is highly important.
Developing a Strong D&B Profile
The main reason why the DUNS number is such a big deal is since the D&B doesn’t just keep a track of your PAYDEX score or give you the DUNS number. Your company’s full profile is kept on record and at every step, your business is tracked, and the details are noted. And just like a personal good credit score, a strong profile here can bring good things for your business. But this is not automatic like the personal credit score.
One of the methods that you can use to boost your score is by making sure that all the credit card report and vendor report of your business reaches the D&B. You would need to take the pains to forward the details to them every now and then if you want to maintain a good standing with the DUNS number.
The Dun & Bradstreet calls the DUNS number the “Social Security numbers” for businesses. But in reality, it has a lot more power than an SSN. This system is used in many countries and many are still entering into the system as well. Moreover, those who participate in this tend to enjoy various benefits from it. So, even though you do not need a DUNS number to operate your business, it is good to have one for opening more doors for your business to grow.
Does your business have a DUNS number?
If not, then it is better to head over to the official D&B website to apply for it right away for enjoying the perks of having a DUNS number. And if you do not have not yet registered your business and are just gathering the various information regarding what you need to do for owning a company, IncParadise can assist you with the registration and incorporation of your business.