Michelle Ramey (00:00):
Hello everyone. And welcome back Michelle Ramey, Oregon Native American Chamber Business Adviser. And today we’re going to be talking with Noah from Capital Access Team of the Oregon Small Business Development Center in Portland.
Noah Brockman (00:16):
Yeah. Hey, so glad to be here. Um, I know you had kind of an interesting topic you wanted to touch on. So I brought a colleague along. What was it again? You wanted to talk about
Michelle Ramey (00:28):
What is a DUNS number, what, you know, we I’ve had some clients, we have it on applications requesting the business dance number and people are asking, what is it? How do I get it? How is it used? What is the deal with?
Noah Brockman (00:41):
Well, okay. So, you know, I thought I want to bring my, my colleague from the capital access team, Mr. Mike Kelsey along because yeah, he’s had, he’s had an interesting, um, career over the years with, in the finance department of, you know, multiple, um, you know, well-known companies that folks would recognize, um, Freightliner Mercedes-Benz and consulting in the area of, uh, accounts receivable. So, you know, I thought, I think we can really, uh, address this talk today with, um, a little assistance from Mike. So welcome Mike,
Mike Kelsey (01:24):
Glad to be here.
Michelle Ramey (01:26):
Hi, nice to meet you. Thanks for joining us.
Noah Brockman (01:30):
So, um, hit us up with some questions around this topic that you think would help clarify for listeners and watchers today.
Michelle Ramey (01:39):
Well, the big one, you know, what is the DUNS number? A lot of people don’t know what they are, how they’re used, how it affects them. Um, you know, why do they need one? And then lastly, how do they get one?
Mike Kelsey (01:54):
All right. Um, a DUNS number is just that it’s just a number. So to try to demystify this a little bit, uh, it is just a site and it creates a file with them that they then start doing some research on a company to check on their credit, uh, could be trade references. It could be banking and so on. So the number itself doesn’t denote the industry or your credit score, it’s just an identifier.
Noah Brockman (02:23):
So Mike, are you saying it’s more like a social security number for a business than it is more like a credit score? It’s not as score. No. Okay.
Mike Kelsey (02:34):
Nope. And that number is what, what Dun & Bradstreet will do internally first is they will verify that your company, that company is the business. Is it one and only of its name and a location, they’ll verify the company as it is in existence and, and, uh, make sure you are the only one that’s getting that specific number. Um, the use for the number is an identifier, so that if a business goes to apply, say, well, a supplier of theirs or a vendor7 or a bank that most of those entities will ask, ask for your Dun & Bradstreet number. And they will use that number to pull a Dun & Bradstreet credit report, similar to pulling a consumer report. If you’re applying individually for say a credit card or whatever. So they, uh, the number, it helps to identify that you are registered with Dun and Bradstreet.
Mike Kelsey (03:31):
And hopefully there are some items in the file that the Dun & Bradstreet researchers have found. And, uh, getting a number is a simple, it’s easy go to dnb.com and, uh, you can apply there. It’s very simple and easy. There is a, uh, floating chat, uh, dot that you can click on. If you need some assistance from somebody at Dun & Bradstreet, and they will help you, they will answer your questions about applying and help you to fill that out. It’s very short. It kind of actions that would impact the score positively negatively. I’m assuming people are at least somewhat familiar with their credit scores, and if they check them at all or see them at all, they go up, they go down depending on payments that are on time. Uh, lots of inquiries into their personal credit file. And so on Dun & Bradstreet is kind of the same way.
Mike Kelsey (04:28):
If you, if your business, a business, um, is not making its payments on time to their suppliers, then there’s on a business loan at a bank or other lenders, then that will negatively affect your score. The score that most companies will look at – businesses. If they’re trying to do business, want to do business with you, you want to do business with them. It’s called a Paydex score, P A Y D E X score. And that’s the number that they will mainly look at it. And there’s even kind of a meter. It’s kind of like the, the fire hazard level, uh, when you’re driving along the highway towards the coast or wherever, uh, you’ll see the fire danger level. And that that meter will go up and down to kind of let people know who are reviewing your file. Uh, what that’s all about as far as positively goes, uh, continuous payment on time to your trade references, to banks, to other agencies that you buy, even your office supplies from, uh, anybody that the company pays the bills.
Mike Kelsey (05:37):
You won’t see things like utilities on there and that type of a thing. So those are not included in the score. Negatively, you can also be affected, uh, a business can also be affected, I’m sorry, credit wise for their business. If the business has, um, unpaid payroll taxes, if the business has charge offs like for, uh, bills, they did not pay at all. And so the vendor or supplier whomever it is wrote it off. Um, and that type of thing, if there are liens or judgments against the company, they can also, that can also negatively affect your credit or your Paydex score. I’m sorry, as far as the who uses it. Building your credit file and dun and Bradstreet is a little bit of an ongoing project for the business owner because Dun & Bradstreet quickly I’ll do this is kind of set up to deal regionally with companies that are publicly traded so that they’re required to put forth publish annual reports and financial statements and other types of documents and the Dun & Bradstreet to stay competitive some years ago now has decided to get into the smaller business world, because it used to be, you pull a Dun & Bradstreet report and you would, they wouldn’t get any information because it wasn’t really, they didn’t do the research on the smaller business.
Mike Kelsey (07:03):
It didn’t call the companies or mail them things to ask about credit ratings and how high of a credit balance do they have with them, and so on. So now they’re very interested in being in the small business arena, because there is competition for that and Dun & Bradstreet wanted to get into it. So they are very active in getting information on your company, uh, to help it grow. And so it, it helps companies just to just like you do personally, you build your credit and as the company grows, you’re building your credit grows and your presence grows and it’s, it gets easier to get more accounts and more credit to do your business and so on and so on.
Michelle Ramey (07:43):
Well, what happens If the business does not have a DUNS?
Mike Kelsey (07:47):
The company that they okay, a business who does not have a Dun & Bradstreet number, if the company wants to do business, where they bank with a supplier, a vendor, other companies that they want to get credit with then as with a bank loan, the owner of the business owners of the business would have to sign personal guarantees. And the company that they’re trying to do business with would then base their credit limit decision or their decision on the credit score and capacity and character. And so on of the owner owners of the company. No.
Michelle Ramey (08:28):
Okay. All right. Thank you.
Mike Kelsey (08:30):
Yeah.
Noah Brockman (08:32):
So if I’m, if I’m a business owner I’m applying for a commercial lease, is it likely that someone might want to know my DUNS number and how…
Mike Kelsey (08:49):
Yes.
Mike Kelsey (08:50):
And how could that impact my application?
Mike Kelsey (08:54):
Um, depends on the situation. If the business that’s applying for a lease is a startup, then they’re basing everything on the strength of the owner or owners of the business. If they’re basing the lease on the company, maybe they’re just moving to a new location, but they don’t have a DUNS number. Then, again, it’s, it’s all personal guarantees, uh, in that situation. Most landlords, especially in the climate that we’re in right now, uh, will not do a lease without a personal guarantee of the owners of the company.
Michelle Ramey (09:34):
Okay. So it sounds like it’s best for the company when they are first starting and like when they apply for their state registration and applying for their EIN or any other numbers that they get out there and do the DUNS as soon as possible,
Mike Kelsey (09:49):
That is a good recommendation. It seems to fall somewhere way down the line of priorities. But it’s, as the question in the chat indicates, you know, when should you start cultivating or thinking about whatever the Dun & Bradstreet situation right away is a good idea. And once you, um, apply it, it’s a done deal you’re in their system. So, um, it’s, it’s a good idea to do it right away. And I’m assuming that a business that even a brand new startup businesses is buying coffee beans from somebody and maybe, uh, you know, having somebody else roast it for them and they’re buying, uh, other supplies for their coffee shop or whatever, that type of thing. So you will have credit, you know, it’ll be too new to rate kind of like your, your consumer stuff is within six months of opening, a personal credit card, you don’t get a credit rating. They’re just TNTR. And that’s what they do at Dun and Bradstreet. They follow suit on that, but it’s, it’s good to get that started, get it in the system. And yes, anytime you have a landmark, uh, maybe you change your business structure from a, an LLC to an S Corp or whatever, hire an employee or two, um, whether it’s part-time or full-time. And so any, any landmarks like that are a good reason to, uh, either get a DUNS number or to notify the Dun & Bradstreet that you have done these things.
Noah Brockman (11:18):
So regular updates to your, maybe an annual update, your Dun & Bradstreet account would be worthwhile because that way you’re ensuring that yep. That the file, the dun and Bradstreet file reflects the current state of your business. And then if you ever want to go, you know, apply for credit, grow the business, your, your DUNS number and account all reflects what’s actually happening and you don’t have to try and go back and correct it at that point.
Mike Kelsey (11:52):
Absolutely. Yes. Perfect.
Michelle Ramey (11:57):
Well, great.
Mike Kelsey (11:57):
So what’s the, I just want to make sure we, we help people, um, to see, like where do they go? Where did they go to apply? Just make it really
Mike Kelsey (12:09):
Sure. Go to dnb.com and it’s, D as in David, N as in Nancy, B as in bravo . com. And, uh, there is a place there to apply and if you need some assistance and I fall into that category, uh, there’s a, there’s a floating chat bubble going around. And all you get to do is click on that and you are connected and they will help you and answer questions, um, almost like a help desk. So it’s, it’s a, it’s a good resource.
Noah Brockman (12:39):
Okay. Curve ball question. Last one, for me, if you are checking out vendors to work with, in other words like, Hey, you know, I’m looking at three suppliers and really important for my business, or I’m looking at three customers that are really important to my business and, you know, can’t take them all. Could you, could you, if we flip this around to using a DUNS number as a customer, as opposed to it being all about your business, how could we use, could we use DUNS numbers to check out other businesses that want to work with us for their viability?
Mike Kelsey (13:24):
Absolutely. You get a, you get their DUNS number and you contact dun and Bradstreet, and, uh, uh, they’ll pull a report for you on that company, if you wanted to see how they do business and, and the bankruptcy filings, uh, charged off accounts. Like I talked about for a negative effect on the DUNS Paydex score and so on, and they tell you how long they’ve been in business, all that good stuff. And yes, we can do that.
Noah Brockman (13:51):
Yeah. You know, I think that’s, that’s a great primer, Mike, thank you so much for making some time to, uh, join us on this topic, because I know that we wanted to fill in some blanks and you’ve helped us do that.
Mike Kelsey (14:04):
Absolutely. And any questions come up? I’m definitely available. Thank you so much. You bet.