To get a business license, you register your business with the correct government agency for your industry and location, then apply for the specific permits your city, county, and state require to operate legally. Most small businesses need at least a general local operating license from their city or county, and many also need state professional or industry licenses plus federal permits if they work in a regulated field (alcohol, firearms, agriculture, transportation, broadcasting, and similar). There is no single national business license in the United States. What you actually need depends on three things: what you sell, where you operate, and how your business is legally structured.
The practical sequence is: choose a legal structure, register the business and get an EIN, then work down from federal to state to local to find every license and permit that applies. Below we walk through each step in an operator's order, show a realistic cost example, and cover how owners fund the licensing, buildout, and first payroll before revenue catches up.
Key takeaways
- There is no single national US business license; requirements are set at the federal, state, county, and city level based on your industry and location.
- Most non-regulated small businesses need only a local operating license plus a state tax/seller's permit; regulated fields (food, trades, healthcare) need much more.
- The correct order is: choose a structure, register and get a free EIN from the IRS, then work federal to state to local.
- Licensing fees are usually modest; the real cash pressure is the lease, buildout, equipment, inventory, and payroll before revenue arrives.
- Revenue-based advances through an MCA marketplace approve primarily on bank deposits and revenue (FICO ~500+), fund from about $10,000, and decide in 24-48 hours, and are never guaranteed.
- Repayment on a revenue-based advance is a share of daily or weekly sales, so it flexes with cash flow rather than a fixed monthly payment.
- Most licenses renew annually; missed renewals are the most common way legitimate businesses fall out of compliance.
What a business license actually is (and what it is not)
A business license is government permission to conduct a specific activity in a specific place. It is a compliance document, not a credential of quality. Depending on your situation you may collect several different pieces, and people loosely call all of them "a business license":
- General operating license (business tax receipt): Issued by your city or county, it registers you to do business locally and is often tied to a local tax. In some jurisdictions (Florida, for example) this is literally called a "business tax receipt."
- Professional / occupational license: Issued by a state board for regulated trades: contractors, cosmetologists, electricians, accountants, healthcare providers, real estate agents.
- Seller's permit / sales tax license: Lets you collect and remit sales tax; required in most states if you sell taxable goods.
- Federal license or permit: Only for federally regulated activities (alcohol, tobacco, firearms, aviation, commercial fishing, etc.).
- Zoning, health, fire, and sign permits: Location-specific approvals, especially for food, childcare, and any storefront.
The key mental model: federal → state → local, filtered by your industry. Most non-regulated small businesses (a marketing agency, a mobile detailer, an e-commerce shop) need far less than owners fear, often just a local operating license and a seller's permit. Regulated fields need considerably more.
Step-by-step: how to get your business license
- Choose your legal structure. Sole proprietor, LLC, S-corp, or C-corp. This determines which registrations and tax IDs you need. Most owners form an LLC for liability separation before applying for licenses, because many local applications ask for your entity type and formation documents.
- Register the business and get an EIN. File your formation documents with the Secretary of State (for an LLC or corporation), then get a free Employer Identification Number from the IRS. You'll need the EIN for licenses, business banking, and payroll.
- Register your business name / DBA. If you operate under a name different from your legal entity, file a "doing business as" (fictitious name) registration, usually at the county or state level.
- Check federal requirements. Only if you're in a federally regulated industry. If you're not, skip to state.
- Get your state licenses and tax registrations. This includes any professional/occupational license from a state board and your seller's permit / sales tax account.
- Get your local licenses and permits. Apply with your city and/or county for the general operating license, plus zoning, health, fire, and signage permits as applicable.
- Renew on schedule. Most licenses renew annually. Missing a renewal is the most common way otherwise-legitimate businesses fall out of compliance.
Where do you find the exact list? Start with your state's official business portal and your city/county clerk's office. The SBA and your local Small Business Development Center (SBDC) will confirm requirements at no cost. Avoid third-party sites that charge steep "filing fees" for forms you can submit yourself for free or near-free.
Federal vs. state vs. local: who requires what
| Level | Who needs it | Common examples | Where to apply |
|---|---|---|---|
| Federal | Only federally regulated industries | Alcohol/tobacco/firearms (TTB, ATF), aviation (FAA), commercial fishing, radio/TV (FCC), transportation (DOT) | The relevant federal agency |
| State | Most businesses, to some degree | Professional/occupational license, seller's permit, state tax registration, DBA (in some states) | Secretary of State + state licensing boards + Dept. of Revenue |
| County | Many, especially unincorporated areas and food/health | Health permits, county business tax, zoning | County clerk / health department |
| City | Nearly all with a physical or local presence | General operating license, zoning, sign permit, fire inspection | City clerk / licensing office |
A useful test: the more your business touches the public physically (food, a storefront, home services, childcare, healthcare), the deeper into local health, fire, and zoning permits you'll go. Purely digital or B2B service businesses usually stop at a local operating license plus state tax registration.
Realistic example: licensing costs for three business types
Fees vary widely by state and city, so treat these as illustrative ranges, not quotes. The point is to plan cash flow, not to predict an exact invoice.
| Item (for example) | Home service (LLC) | Small restaurant | E-commerce shop |
|---|---|---|---|
| LLC formation (state filing) | $50-$200 | $50-$200 | $50-$200 |
| EIN (IRS) | $0 | $0 | $0 |
| DBA / fictitious name | $10-$100 | $10-$100 | $10-$100 |
| Local operating license | $50-$400/yr | $100-$500/yr | $25-$200/yr |
| State professional license | $100-$500 (if a trade) | n/a | n/a |
| Seller's permit | Often $0 | Often $0 | Often $0 |
| Health / food permits | n/a | $300-$1,000+ | n/a |
| Fire / zoning / signage | Varies | $200-$1,500+ | Usually minimal |
| Illustrative first-year total | ~$300-$1,200 | ~$1,500-$5,000+ | ~$150-$700 |
For most non-regulated businesses, licensing itself is modest. The real cash pressure comes from everything that has to happen around licensing: a lease and buildout, equipment, inventory, insurance, and payroll before the first month of revenue lands.
Funding the license, buildout, and first months
Getting licensed is rarely the expensive part. The expensive part is being ready to operate the day the license clears: deposits, equipment, inventory, staff, and the gap before customer revenue arrives. Traditional bank and SBA loans are excellent for well-capitalized, established borrowers, but they often ask for two-plus years of history, strong personal credit, and collateral, and can take weeks. New and thin-file owners frequently don't qualify yet.
For owners who are already generating deposits (a business relocating, expanding, or adding a licensed line to an existing operation), a revenue-based advance through an MCA marketplace is often the fastest realistic option. Approval is driven primarily by your bank deposits and revenue rather than credit score, so it fits owners with a FICO around 500 or higher. Typical parameters: funding from about $10,000, decisions in 24-48 hours, and repayment tied to a small share of daily or weekly sales, which flexes with your cash flow instead of a fixed loan payment. It is a cash-flow tool, not a credit-building loan, and it is never guaranteed. Approval and terms depend on your actual deposits and the funder's review.
The honest framing: use revenue-based funding when speed and cash-flow-based approval matter more than the lowest possible cost of capital, and when the money will produce revenue quickly (inventory, equipment, a location that opens sooner). It is not the right tool for a pre-revenue startup with no deposits to underwrite. For a deeper comparison of options, see our guides on business funding options and how a merchant cash advance works.
Decision framework: when to fund your setup with a revenue-based advance
Works best when:
- You already have consistent business bank deposits the funder can underwrite (an existing business expanding, relocating, or adding a licensed service line).
- Your credit is thin or bruised (FICO ~500+) but revenue is real, so traditional financing isn't available fast enough.
- You need at least ~$10,000 and you need it in days, not weeks, to hit a lease date, buy inventory, or complete a buildout.
- The capital converts into revenue quickly, so repayment tied to sales stays comfortable.
Avoid or reconsider when:
- You're truly pre-revenue with no deposit history: there's nothing to underwrite, and a startup grant, microloan, or personal capital fits better.
- The cost only covers small, one-time licensing fees you can pay out of pocket; don't finance a $300 license.
- Your margins are thin enough that a daily/weekly revenue share would strain operations.
- You qualify for, and have time to wait for, lower-cost SBA or bank financing.
Underwriter's rule of thumb: match the tool to the job. License fees, from savings. A location, equipment, and inventory that generate revenue, from financing sized to that revenue and repaid from it.
Staying compliant after you're licensed
- Calendar every renewal. Most licenses and permits renew annually; some tax registrations file quarterly. Put every date in one place.
- Update on any change. Moving locations, adding a service line, hiring your first employee, or changing ownership can trigger new permits or amendments.
- Keep separate business banking. Clean, separate deposit records make renewals, tax filing, and any future financing far easier, and MCA marketplaces underwrite directly from those statements.
- Post required documents. Many local licenses must be physically displayed at your place of business.
- Verify before you buy help. Confirm requirements through official state, county, and city portals or a free SBDC advisor before paying a third party to "handle licensing."
Frequently asked questions
Is there a single national US business license?
No. There is no federal business license that covers all activities. Federal permits exist only for specific regulated industries (like alcohol, firearms, aviation, and broadcasting). For everything else, licensing happens at the state, county, and city level based on your industry and location.
Do I need a business license for an online business?
Usually yes, at least a general local operating license in the city or county where you're based, plus a seller's permit if you sell taxable goods. Online doesn't mean license-free; it means your requirements are typically lighter than a physical storefront because you skip most health, fire, and signage permits.
How long does it take to get a business license?
It ranges from same-day for a simple local operating license filed online to several weeks for regulated activities that require inspections (food, childcare) or state board review (contractors, healthcare). Plan the licensing timeline before you sign a lease so your permits and your opening date line up.
How much does a business license cost?
For most non-regulated small businesses, the license itself is modest, often under a few hundred dollars a year. Costs rise sharply for regulated fields with health, fire, and professional-board requirements. The larger expense is usually the buildout, equipment, and inventory around opening, not the license fee itself.
Can I get funding to open my business before I'm profitable?
If you already have business bank deposits (for example, an existing business expanding or relocating), a revenue-based advance through an MCA marketplace can fund from about $10,000 in 24-48 hours, approved primarily on deposits and revenue rather than credit, with FICO around 500+ often eligible. If you're truly pre-revenue with no deposits, a grant, microloan, or personal capital is a better fit. Funding is never guaranteed and depends on the funder's review.
Do I need an LLC before getting a business license?
Not always, but it usually helps. Many local license applications ask for your entity type and formation documents, and forming an LLC first gives you liability separation and a clean EIN to register with. Sole proprietors can still get most local licenses, but they carry personal liability for the business.
What happens if I operate without a required license?
Consequences range from fines and forced closure to back taxes and, for regulated trades, personal liability and loss of the right to practice. Operating unlicensed can also void insurance and block you from financing, since lenders and MCA funders review your compliance and bank records. It's far cheaper to license correctly up front.
Where do I find the exact licenses my business needs?
Start with your state's official business portal, your city and county clerk's offices, and the SBA. A local Small Business Development Center (SBDC) will confirm your full federal-state-local requirement list for free. Be cautious with third-party services that charge high fees for filings you can often complete yourself.
