Can You Get a Startup Business Loan With an EIN Only?

Nerdy takeaways

• EIN-only business loans can be appealing because they can help keep your personal and business finances separate. This can be especially useful if you have poor personal credit.

• True “EIN only” business loans are rare. Most lenders need more than just an EIN to approve a small-business loan. For example, lenders may want to see a strong business credit score or want you to sign a personal guarantee.

• You may be able to find loan options with no or minimal personal credit score requirements. These types of loans are often expensive, and you may need to explore alternative financing options that don’t involve a credit check.

What is an EIN?

An EIN is a unique nine-digit number issued by the IRS to businesses in order to track filings and taxes. Think of it like a Social Security number for your business. EINs are required for most business types except single-member LLCs and sole proprietors without employees.

Having an EIN can add to your credibility and show lenders that your business is legitimate. It’s also the first step in building your business credit, which can help you qualify for a loan.

You can apply for an EIN online for free with the IRS.

Lenders that offer business loans to startups using an EIN

The below companies offer financing options with low (or no) personal credit score and time in business requirements.

Business loans you may be able to get with an EIN only

Most business loan applications consider the owners’ personal credit in some way. But there are a handful of funding options that may not — or that have more lenient credit requirements. Here are a few of them.

Online business loans

While online business loans sometimes have lower minimum credit requirements, they don’t typically skip credit checks altogether.

Even so, they’re usually more flexible than traditional options like banks or credit unions. Most online lenders list minimum credit requirements, so business owners should research and compare before applying.

Invoice financing

Invoice financing lets a business owner borrow against their unpaid invoices. Approval depends on the creditworthiness of the business’s customers instead of the business owner.

This type of borrowing generally doesn’t hurt the borrower’s personal or business credit score. It can help address short-term cash flow issues by putting money in a business’s pockets before customer invoices are due.

Microloans

Many nonprofits operate in the microlending space. Microloans typically max out at $50,000 and are generally meant to support small-business owners from traditionally underserved communities. For this reason, microlenders often have more flexible qualification requirements.

For example, Accion Opportunity Fund requires a 620 personal credit score, but it also considers other factors and accepts applicants with only 24 months of business history.

Kiva U.S., another nonprofit offering small-business microloans, determines creditworthiness through crowdfunding efforts rather than a personal FICO score.

These smaller loan opportunities can give you access to low-interest working capital that may help tide you over while you build your business history and/or take steps to strengthen your credit score.

Equipment loans

With equipment loans, the equipment you finance serves as collateral. This means the lender can seize it if you don’t pay the loan back. This built-in security may make lenders more willing to work with borrowers who have a shorter business track record or low credit score.

For example, National Funding offers online equipment loans to businesses with at least 24 months in operation and a personal credit score of 600 or higher. But you’ll need to sign a personal guarantee.

You’ll likely have greater success getting financing if the equipment you’re trying to buy has strong resale value.

» MORE: Best equipment financing and loans

Merchant cash advances

Merchant cash advances are lump sums of cash that businesses repay with credit card sales over time. However, MCAs usually come with much higher interest rates than traditional lending options and don’t build your business credit.

Unlike with loans, eligibility is based on credit card receipts as opposed to a credit score. But because of its high rates, this type of funding should be a last resort.

» MORE: Best merchant cash advance companies

How to apply for a loan with just an EIN

Leverage your business’s strengths

Most small-business lenders look at personal credit and financials when evaluating loan applications. If you prefer to apply with just an EIN, you’ll need to show that your business is strong enough to qualify based on its own merits. That means emphasizing strong points about your business, such as:

• A good business credit score.

• Strong and consistent revenue.

• A detailed business plan that explains how you’ll repay the loan.

• A long financial history.

• High-value collateral you can use to secure the loan.

A personal guarantee can also strengthen your application and is required by most lenders. Signing one means you’re personally responsible to repay the loan if your business can’t.

Build business credit

For startups that haven’t been around long enough to build their business credit or demonstrate a history of financial success, it’s important to start building business credit as soon as possible.

You can begin by applying for a business credit card with your EIN and establishing trade credit with vendors that report payments. Be sure to pay your bills in full and on time (or early, if possible).

You’ll also need to register for a free DUNS number through business credit bureau Dun & Bradstreet if you don’t already have one.

» MORE: How to get a business credit card with an EIN only

Pros and cons of business loans with EIN only

Pros

✅ No personal credit check. If you’re facing personal credit challenges, or want to avoid a personal credit pull for other reasons, you can still get funding with an EIN and strong business credit.

✅ Easier to get funding. Many no credit check loans rely on things other than financials, like the value of outstanding invoices, so it can be easier to get approved.

✅ Easier application. Because lenders don’t need to look at personal financials, the application process can be easier than traditional loans.

Cons

❌ Can be expensive. Lenders often charge higher fees and rates when they forego a personal credit check or lend to borrowers with less-than-stellar credit.

❌ Can be hard to find. Most traditional lenders like banks don’t offer loan options without credit checks. Alternative financing can be risky, and reputable lenders, invoice financing companies or MCA companies can be difficult to find.

❌ Can put your business at risk. Higher fees, APRs and shorter repayment terms common with alternative loans can strain your cash flow, making it harder to pay for business expenses.

» MORE: Business loans for companies with low revenue