EIN-Based Business Funding: What It Is and What It Is Not

EIN-based funding is often promoted online as funding that completely bypasses personal credit. While EIN-based products do exist, this description oversimplifies how these products work.

EIN-based funding generally means that a lender evaluates the business as a separate entity using its Employer Identification Number. This may reduce reliance on personal credit, but it does not always eliminate it.

Depending on the lender and product, evaluations may still include:

• Personal guarantees

• Ownership structure

• Business banking activity

• Revenue and cash flow

In some cases, personal credit is reviewed as a supporting factor rather than the primary decision point.

EIN-based funding shifts how risk is evaluated. It does not remove risk evaluation entirely.

Business owners should ask clear questions about whether personal guarantees are required and how applications are assessed before proceeding.

Commonly Referenced Laws (For Context Only)

EIN-based funding discussions are sometimes paired with statutes related to identity or credit reporting. Laws such as:

• 18 U.S.C. §1028A which address aggravated identity theft. It applies only in cases of fraud, not legitimate credit inquiries.

-or-

• 15 U.S.C. §1681n which covers civil liability for willful violations of credit reporting law. It is not automatic and requires proof of misconduct.

These laws do not remove legitimate inquiries or guarantee EIN-only approvals.

For full explanations, visit the Credit & Consumer Laws Explained section.