One decision a new business owner must make in the start-up phase is what form of business organization is appropriate. If you choose to be a sole proprietor, a federal identification number is not required unless you have employees. For all other business organizations, an identification number is required. If you will need outside financing to start your business, your personal credit history will have an effect on your ability to obtain financing. If you have poor personal credit history or have filed for personal bankruptcy in the past seven years, you may not be eligible for a guaranteed loan from the Small Business Administration.
Some options exist for financing from private, nontraditional lenders.
However, the interest rates these lenders offer may be unacceptably high. Do this even if your credit record is perfect, because errors can be made.