Can non-immigrants get business credit without an SSN?

Dear Your Business Credit,

SCORE workshops teach seminars saying not to give your Social Security number for business loans and business credit cards. However, after reading your article there seems to be no way around establishing business credit without giving your Social Security number unless you’re an immigrant, is this true? What are people talking about when they say you can get SBA loans and business credit cards without ever giving your Social Security number? — Jasmine

Dear Jasmine,

After some follow-up correspondence with you, I tried to track down the leader of the workshop you mentioned. SCORE, an educational nonprofit organization for small businesses, said he is no longer working at that location, so I was unable to speak with him about the advice you received.

You are right in that you will generally be asked to provide your Social Security number somewhere in the process of applying for a business credit card or traditional bank loan — unless you have an Individual Tax Identification Number (ITIN), an identification number available to immigrants who can’t get a Social Security number. As I mentioned in my previous column, “Getting a business card without a Social Security number,” some credit card applications ask for an Employer Identification Number, or EIN — and applying under that number can be a good way to build your business credit — but to secure one, you need to provide a Social Security number or ITIN.

I asked the U.S. Small Business Administration if it is possible to get an SBA-backed business loan without proving a Social Security number and was told by a spokesman that the answer is no. In fact, all principals in the business need to provide a Social Security number to apply.

Not all bank loans are backed by the SBA. However, when I checked with Jana Rouble, a business development officer for SBA and USDA loans at Fidelity Bank in Dallas and vice president of the North Texas Association of Guaranteed Government Lenders, she told me she had not heard of any bank loans that allow an applicant to skip this step.

Banks may have their own policies, so if you don’t want to give your Social Security number, tell your banker and see if there are any other forms of identification you can provide. You might also try this approach when applying for a credit card. It is possible that they may quietly offer some other options, but only if you ask.

Alternative lenders may also have their own policies. However, they generally charge higher interest rates than a bank.

For readers who don’t want to use their Social Security number to get credit and are looking for an attractive rate, I would suggest appealing to family members and friends. Borrowing from people who know and trust you can be a speedy and often paperless path to financing. Just make sure you don’t borrow more than you can reasonably pay back if the business hits a rough spot.

If you go this route, treat these loans like you would any other debt and make payments every month, on time. Many an entrepreneur has damaged close relationships by being lax about loans from the folks they care about most. If there’s a high risk you won’t be able to stay on track — and be honest with yourself about this ahead of time — find a way to bootstrap using revenue from the business. You don’t want to dread Thanksgiving dinners for the next 10 years because of that $10,000 you couldn’t pay back to Uncle Joe. It’s not worth it.

See related: Can you build business credit without a Social Security number?, Do I need credit cards to build my business credit?