Can you open a business bank account without an EIN?

Opening a business bank account is one of the first steps in getting your company up and running. But what if you haven't received your Employer Identification Number (EIN) yet?

You may still be able to open a business bank account without an EIN, depending on your business structure and financial institution. Some sole proprietors can use their Social Security number (SSN), while partnerships and corporations generally need an EIN. Certain financial institutions, like Mercury, may let businesses open accounts while their EIN applications are pending.

Here's how EIN requirements work, what identification alternatives banks may accept, and how to open a business account while waiting for your EIN.

An Employer Identification Number (EIN) is a unique nine-digit federal tax identification number that the IRS assigns to businesses and other entities. It serves as a tax identifier for your business, much like an SSN does for an individual.

Businesses use EINs to file federal tax returns, pay employees, apply for certain licenses, and establish business credit. Partnerships and corporations generally need an EIN, as do businesses that hire employees or meet certain other IRS requirements.

When you open a business bank account, financial institutions request tax identification information to verify your business's identity and comply with federal regulations. An EIN satisfies that tax identification requirement, though some institutions may accept alternatives or allow you to open an account while your EIN is pending.

Whether you can open a business bank account without an EIN depends partly on your business structure and the financial institution. Some businesses may not need an EIN at all, while others may need one but might also be able to open an account before receiving it.

Can sole proprietors open a business bank account without an EIN?

Often, yes. Because a sole proprietorship isn't legally separate from its owner, sole proprietors can generally use their SSN for tax purposes unless they're required to obtain an EIN, such as when they hire employees.

Some financial institutions accept an SSN to open a business account, but requirements vary by financial institution.

Can single-member LLCs open a business bank account without an EIN?

Possibly. The IRS generally treats single-member LLCs as “disregarded entities” for federal income tax purposes unless they elect otherwise. Some may not need an EIN, although requirements differ for LLCs with employees, certain tax obligations, or foreign ownership.

Financial institutions can still require an EIN to open an account, even when the IRS doesn't.

Do partnerships and corporations need an EIN to open a business bank account?

Yes. The IRS generally requires partnerships and corporations to have an EIN, regardless of whether they have employees. This also applies to multi-member LLCs, which are generally taxed as partnerships unless they elect corporate tax treatment.

Financial institutions will generally require an EIN for these businesses, although some may allow accounts to be opened while the EIN is pending.

In some cases, yes. The key is understanding what each number is used for:

• Social Security number (SSN): Identifies an individual for tax and Social Security purposes.
• Individual Taxpayer Identification Number (ITIN): Identifies certain individuals who need a U.S. taxpayer identification number but aren't eligible for an SSN.
• Employer Identification Number (EIN): Identifies a business or other entity for federal tax purposes.

A sole proprietor may be able to use an SSN, or in some cases an ITIN, to open a business account if the financial institution accepts it.

But if your business is required to have an EIN, your personal SSN or ITIN won’t take it’s place. Financial institutions may still ask for personal information to verify the identities of the business's owners or controlling individuals, but this doesn't replace the need for an EIN.

Can I open a bank account without an SSN or ITIN?

If you're an international founder, you may have an EIN for your business but no SSN or ITIN of your own. Fortunately, that doesn't necessarily prevent you from opening a U.S. business bank account. Federal regulations allow financial institutions to verify non-U.S. individuals using other forms of identification, such as a passport. Each institution determines which documents it accepts.

Mercury supports eligible U.S.-registered businesses with existing or planned U.S. operations, including those founded by non-U.S. residents. International founders can use their passports for identity verification, subject to geographic and industry restrictions.

When you apply for a business bank account, you'll typically need to provide information about your business, its owners, and how you plan to use the account. Exact requirements vary by financial institution, but you may be asked for:

• Tax identification: An EIN, SSN, or other accepted taxpayer identification information
• Formation documents: Articles of Organization, Articles of Incorporation, or equivalent documents
• Business licenses: Any applicable permits or registrations
• Ownership agreements: Operating, partnership, or other ownership agreements
• Personal identification: Government-issued ID for owners or controlling individuals
• Addresses: Your business address and relevant residential addresses
• Ownership information: Names and ownership percentages of the company's owners
• Business details: Your industry, expected activity, and sources of funds

If your EIN is pending, check whether the financial institution accepts a completed Form SS-4 and if you need additional proof that you've submitted the application to the IRS. Having your formation and ownership documents ready can also help avoid delays unrelated to your EIN.

The process of opening a business bank account depends on whether your business needs an EIN and whether you've already applied for one. Here are the steps to follow:

1. Confirm your EIN requirements: Check whether the IRS requires your business to have an EIN. Sole proprietors and certain single-member LLCs may be able to use their SSN or ITIN instead.
2. Choose a financial institution: Find out whether it accepts an SSN or ITIN for your business structure or allows you to open an account while your EIN is pending. Some institutions require an issued EIN before you can apply.
3. Prepare your documentation: Gather your formation documents, ownership information, government-issued identification, and any other required records.
4. Submit your application: If your EIN is pending, provide proof that you've applied, if the institution accepts it. The institution may request additional information to verify your business.
5. Provide your EIN when issued: If you opened an account while your EIN was pending, submit the number within the institution’s required timeframe.

Not every institution offers the flexibility to open an account while your EIN is pending, and some may restrict account activity until you provide it. Before applying, check whether you can use the account immediately and whether any transactions or features remain restricted until your EIN arrives.

As your business grows or its operations change, you may find that you need an EIN, even if you didn't need one when you first started. You'll generally need an EIN if you:

• Form a partnership or corporation
• Hire employees
• Need to file certain employment or excise tax returns
• Make certain changes to your business structure or ownership

You may also need an EIN to open a business bank account, apply for certain licenses, or establish business credit. For example, a freelancer operating as a sole proprietor might initially use an SSN for tax reporting and banking. If they later hire employees or incorporate, they'll generally need an EIN for federal tax purposes. Even if you don't need an EIN right away, getting one early can save you some administrative work down the road.

Getting an EIN is free when you apply directly through the IRS, so there's no need to pay a third-party service. If you're eligible to use the IRS online application, you'll generally receive an EIN immediately after approval. You'll need information about your business structure, the responsible party, and the business's principal address.

If you're forming a new legal entity, complete your state formation process before applying for an EIN. The application process differs depending on your circumstances:

• Applicants eligible to apply online: If your principal place of business, legal residence, or principal office is in the U.S. or a U.S. territory, and the responsible party has an accepted taxpayer identification number, such as an SSN or ITIN, you can apply online through the IRS website.
• International applicants: If your principal place of business is outside the U.S., apply by phone, fax, or mail using the IRS's designated process.

Processing times depend on the application method. Online approvals can be immediate, while fax and mail applications take longer. The IRS currently estimates approximately four business days for qualifying fax applications and four weeks for mailed applications, although delays can occur.

Waiting for your EIN won't necessarily delay opening a business bank account, but it can if your financial institution requires the number before approving your application. That delay can be frustrating when you're trying to get your business finances up and running.

With Mercury, you don't necessarily have to wait for your EIN to start banking. If you're eligible, you can apply using a completed Form SS-4 and start using your account once approved, even if your EIN is still pending. You'll just need to provide your EIN within 90 days of approval, and some account features may be restricted until then. Learn more about business banking through Mercury.