x
Square

Important Business Information when Applying for a Loan

There’s a lot of business lingo out there. Here’s a list of common business terms you may come across when owning a business and applying for financing.

 

Business Entity Type

When you start a business, you will want to set it up in a way that is right for you and your business partners. Your entity type determines, among other things, which annual tax forms you will need to file.

 

If you apply for a loan through Square Capital, you are asked to select your Business Entity Type, from one of the following options: Sole Proprietorship, Limited Liability Company, S Corporation, C Corporation, or Partnership.

 

If you are unsure about what your entity type is, or would like more information about business entities, feel free to check out our Town Square blog, Business Structure 101.

 

Filing your business’s taxes is a highly individualized process. Please be sure to consult with a tax advisor if you have any questions.

 

Employer Identification Number (EIN)

An Employer Identification Number is a type of Federal Tax Identification Number (TIN) used to identify a business. It’s like a Social Security number (SSN), but for your business. Many Sole Proprietorships don’t have EINs because they don’t have employees or engage in other activity that requires an EIN. If you’re unsure whether you need an EIN or may benefit from having an EIN, we suggest you consult with a tax advisor.  

 

State Identification Number  

If your business is not a Sole Proprietorship, you may also have a State ID Number. State ID Numbers are assigned to your business by the state you are operating in. This number is unique to your business and is used to file sales taxes. When you apply for a loan through Square Capital, we ask for your government issued EIN, but not your State ID Number. A State ID Number is also sometimes referred to as a Sales Tax Permit, Certificate of Authority, Reseller Permit, Sales and Use Tax Number, or Excise Business Tax.

 

Beneficial Owners

A Beneficial Owner is (i) each individual who directly or indirectly owns 25% or more of the business applying for a loan, and (ii) one individual with significant responsibility to control, manage or direct the business, such as an executive officer or senior manager. When applying for a loan through Square Capital, if you’re not a Sole Proprietorship you’re required to submit additional identifying information on behalf of any Beneficial Owner(s). Square Capital won’t contact any of the listed Beneficial Owners or notify them of your loan request, however we may ask for a copy of their identification, such as a driver license, passport, or Social Security card.

 

For more information about Beneficial Ownership, please visit our FAQ

 

Helpful Business Resources:

 

IRS.GOV: Lost or Misplaced Your EIN?

IRS.GOV: Operating a Business

1,367 Views
Message 1 of 2
Report
1 Best Answer
Alumni

Best Answer

Thanks for sharing this @Regina_B! If anyone is interested in general business documentation that's good to have on hand, check out this article.

View Best Answer >

1,339 Views
Message 2 of 2
Report
1 REPLY 1
Alumni

Best Answer

Thanks for sharing this @Regina_B! If anyone is interested in general business documentation that's good to have on hand, check out this article.

1,340 Views
Message 2 of 2
Report