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An ITIN, or Individual Taxpayer Identification Number is a unique number assigned to taxpayers who may not be able to obtain a social security number. An ITIN is a way for them to track their returns, pay returns, and comply with applicable laws. Having an ITIN is not the same as a social security number, and when it comes to running a business there may be some additional factors that need to be taken into consideration that would not apply if using a Social Security Number.
Understanding Business Loans with an ITIN Number
What Is an ITIN Loan?
These special programs allow for borrowers without a social security number to obtain financing for various business purposes. Given the lack of a social security number, these programs often have requirements the person seeking the loan must meet.
Can I Get a Business Loan with an ITIN?
It is possible to get a business loan without an ITIN. ITIN loans exist at lenders who offer this type of loan and will often have requirements which differ from a traditional loan process when applying.
Who Offers ITIN Business Loans?
It is always recommended to shop around and find a loan which you may qualify for with the best rate possible. When it comes to ITIN loans you can get one even online from providers such as Snapcap or BHG Money.
What Types of ITIN Business Loans Are Available?
Not too different from traditional loans, or loans which are associated with a person's social security number, business loans can be obtained with ITINs for mortgages, equipment, and even purchasing a business car.
What’s the Best Business Loan for Someone with an ITIN?
The best loan for someone with an ITIN will depend on their situation, what rate they can afford, how much risk is associated with what is being financed, what is their credit history, among other things. When it comes to loans there are always many factors to consider.
How Much Money Can You Borrow with an ITIN Business Loan?
Similar to a traditional loan, or loan associated with a person's social security number, the amount of financing available for a loan will depend on the various factors lenders would consider when writing a loan.
What Are the Requirements for an ITIN Business Loan?
Requirements may vary from lender to lender but in general you can expect to demonstrate that you have a valid ITIN, a valid business, possibly a history of tax returns, proof of funds, and possibly meet a criteria for revenue; demonstrating a history of hitting annual revenue of a certain amount.
How to Get a Business Loan with an ITIN
You will need to start the process by finding lenders who offer products that you are looking for, in this case ITIN accepted business loans. You can find these products both in person at local lending establishments or online.
Once you have found lenders you may consider comparing rates to find the best scenario which will fit your business's financial picture. Be sure to check rates against online lenders as they may have better deals available than retail lenders.
The next step will be to start the loan application process, provide the information required as defined by your lender and continue communicating to answer any questions they may have. Once you have been approved the loan will deposit as directed and you can begin making principal payments at the predetermined cadence.
Tips to Improve Your Chances of Approval for an ITIN Business Loan
While there are no guarantees, there may be a few things you can do to improve your chances of qualifying for a business loan using your ITIN.
- Be able to demonstrate consistent revenues in your business over longer periods of time. A business which has a proven record of earning may have a higher chance of securing a loan.
- Save up some cash, be able to show lenders that you have funds for repaying the loan. This may show that as an owner you’re seeking to leverage debt rather than borrow to get by.
- Offer collateral, in the event that you're unable to repay your loan, give the lender something of value they can utilize to pay off the debt, such as a car or equipment.
Pros and Cons of Business Loans with ITIN
Like any financial instrument there are pros and cons when it comes to being an ITIN borrower on a business loan.
Pros of Business Loans with ITIN
- Making payments on time, consistently on your loan will build your businesses credit history and make securing future loans even simpler.
- Ease of application, with the offering of online lenders you can now apply online and secure financing from the comfort of your home.
- Flexibility, when obtaining financing with a business loan utilizing your ITIN you can spend the funds to grow and invest as you see best as an owner. There may be some restrictions however so be sure to check with your lender before signing a loan.
Cons of Business Loans with ITIN
- Typically an ITIN loan will have more requirements for the buyers including a valid ITIN, a valid business, possibly a history of tax returns, proof of funds, and possibly meet a criteria for revenue.
- There are typically also lower loan amounts available for ITIN borrows versus traditional loans associated with a social security number. This may not always be the case however.
- Rates for ITIN business loans may see higher interest rates given the inherent risk they may present.
Top Lenders Who Offer ITIN Business Loans
There are many lenders who offer products such as an ITIN business loan. With the rise of online borrowing this list is growing every day given the ease of application and availability of funds for these loan types. This non exhaustive list in no particular order will give you a sense:
Tips to Improve Your Chances of ITIN Business Loan Approval
While there are no guarantees, there may be a few things you can do to improve your chances of qualifying for a business loan using your ITIN.
- Be able to demonstrate consistent revenues in your business over longer periods of time. A business which has a proven record of earning may have a higher chance of securing a loan.
- Save up some cash, be able to show lenders that you have funds for repaying the loan. This may show that as an owner you’re seeking to leverage debt rather than borrow to get by.
Offer collateral, in the event that you're unable to repay your loan, give the lender something of value they can utilize to pay off the debt, such as a car or equipment.
Why Online Lenders are the Best Option for ITIN Business Loans
When searching for an ITIN business loan you may want to start your search online. Not only may you find more options, but possibly a better overall experience. Online business loan lenders have a few advantages over traditional lenders.
- Accessibility: Online lenders may have fewer restrictions and requirements making it easier to qualify for a loan.
- Convenience: Applying from your computer or laptop, this process is much more streamlined than driving to physical locations and having conversations in person.
- Technology: Online lenders may have more streamlined processes for documentation submission, approval, and offer quicker support to clients, all which you may benefit from going with an online lender.
Final Word
While the initial impression of ITIN business loans may be that they are hard to get, are associated with bad rates, and less than par customer experience, the rise of technology and online lending has opened paths for more businesses to get excellent experience in financing for their business. Owners who have met the various requirements of obtaining an ITIN business loan will enjoy the benefits of lending for their business while not sacrificing in terms of what their ITIN can get them, unlocking more potential for their business.
