Can I obtain a business loan with the EIN?

by Alexandru Tanase Dec 03, 2022

Table of Contents

1. The importance of business credit
2. What are the steps needed to apply for business loans without an EIN?
3. Loans that don't need a personal credit check
4. Collateral loan
5. Invoice factoring and financing
6. Line of credit or a working capital loan
7. Merchant cash advance
8. Conclusion

One of the toughest challenges for many businesses is getting the funding they need to get started. That's true in the beginning when you lack investors. A startup can't obtain a business loan with an EIN. In that case, personal checks are tough to avoid. However, a small business with some business credit already built will be able to use its EIN for any new credit. Alternatively, you could use a business credit builder loan.

The importance of business credit

The thing to remember about business credit is that it's in the business's name and not the company's owner. What business credit score is required to obtain a loan via the EIN? That will vary, but it will be 80 or better on the Paydex scale. Another requirement is that you must be in business for a year or even more than that.

What's an EIN, though? The EIN is an identification number similar to the social security number. The difference is that this is for businesses only. You build credit by acquiring items from vendors via a credit card. Then you pay your loan on time and send the info to credit agencies. You can then go to the best business funding in USA and obtain the funds you want.

What are the steps needed to apply for business loans without an EIN?

The thing you need to do is to establish a foundation for funding. What this means is that you start building credit beforehand. You also need to understand that lenders need to see bank statements; these are important. You must acquire a DUNS number and have 3+ payment experiences with the business card. That will start your PAYDEX score.

PAYDEX is one of many credit scores for businesses. However, this is the most popular one. As we said earlier, you want to acquire loans and repay everything. If you keep your credit score at the right level, it will help you quite a lot. The last thing you want is to deal with any issues that will make it harder to pay back your loans. That's where a business credit builder in USA can be helpful!

If you have good credit, lenders will be okay with giving you a loan just via the EIN. However, you can only obtain an SBA loan using just the EIN. The reason is that the Small Business Administration will perform personal credit checks. Sometimes such loans will come with a better deal attached to them. However, the Small Business Administration might also require a personal guarantee. In these cases, you can even obtain a better interest rate.

Loans that don't need a personal credit check

Some of the smaller loan types will only need your EIN. It all comes down to understanding which loans will need that, and in the end, it can help convey a much better value and results.

Collateral loan

A collateral loan usually means you will receive the loan; you need to share collateral. It can be a business asset or anything similar to that. Lenders don't care as much about your credit history when something like this happens. The reason is that they already have something solid that they can re-sell to get their money back. That's why having collateral is a great idea, and it's one of the better loan types.

This way, you can be confident that you can repay your loan. It will also prevent any problems while obtaining the loan you need for your business. Having assets you can use as collateral will usually make this particular loan very valuable, and it's one of those things that will help deliver an exceptional result and excellent value. A business credit building Agency might help boost your credit, yet you can still use the collateral system.

Invoice factoring and financing

You can opt for invoice financing when you have a business with many unpaid receivables. The factoring and financing processing are identical, with a single difference. The invoice factoring process also entails that the financing company will go after those businesses that did not pay their invoices.

It doesn't require a personal credit check because it comes down to what you own. It also focuses on the debtor's reputation. So it can do little with your particular debt timelines. In a situation like this, it will become much easier to manage the entire process, and the experience and results will be exceptional in the long term.

Line of credit or a working capital loan

You can see the line of credit as something very similar to the credit card but without the card itself. You get the funding you want; then, you use it how you see fit and repay it. Many businesses use this method because it allows them to cover daily expenses. On top of that, it helps ensure they don't worry about any lack of adequate funding. If you still have credit issues, the Credit restoration Agency in USA can assist.

Accessing a line of credit can be challenging if you have bad credit. You want to repay every loan on time, which will help prevent any possible credit issues. That will eliminate any concerns, especially if you buy land or equipment. Lenders will still look at your payment history, allowing you to prevent any major issues. In doing so, you will finally be able to gain the necessary funds while assuring that your company continues working on the desired projects. It's a stellar solution and one of the things that will prevent any downsides.

Merchant cash advance

Even though it might sound like a loan, the merchant cash advance is not exactly a loan. What you do is sell the receivables to lenders. They will pay you a percentage, which means there's no specific credit check. Instead, the lender already gets paid via your receivables. You can use this particular approach if your business has bad credit. It can still help save a significant amount of time, and you don't have to wait until all receivables get reimbursed.

Getting fast cash is ideal for any business, and this approach helps you achieve great results from that perspective. The downside is that you will encounter fees that are usually higher than usual. Yet it's still a good option, especially if you have poor credit. It can help you improve your credit if you use such an option, so the benefits are impressive. Having a good return and ensuring you can have cash for your business is worth any downside.

Of course, the higher fees can make this particularly expensive for a business. But if you get past that, you will find that everything works as expected, and you will have a much better result. It's a good idea to use a merchant cash advance only as a final solution in case other options don't pan out. That's why business credit monitoring in the USA can still be a good option.

Conclusion

The advantage of small business loans is that most of the time, you can access them quickly if you have good credit. You still need to assess the requirements of each loan. Building up the business credit required to achieve such a result will take some time. Yet it's possible if you spend the time necessary to achieve such a goal. Use that as an advantage, build up your credit, and eventually, you can acquire a loan with the EIN! If not, you can use financing assistance services, making the loan process quicker.