Trade credit is credit in a business name that is linked to the company’s EIN number. This is a credit that a business owner can get that is not tied to your SSN.
When built correctly, the SSN is not even provided on the application, which means there is no personal credit check to get this type of EIN credit.
When you apply for something like a car loan, the lender draws your personal credit using your name, address, and social security number.
This information is sent to consumer credit reporting agencies, and they provide the lender with a credit report with all the information they have on someone with a similar name, address, and SSN.
With this type of credit, an inquiry is made on your consumer credit report and it is used to make the loan decision. Also, the credit you get will be reported to consumer reporting agencies.
When you apply for something like a business loan, the lender draws your business credit using your name, address, and EIN number.
This information is sent to commercial credit reporting agencies, and they provide the lender with a credit report with all the information they have on a business with a similar name, address, and EIN.
With this type of credit, an inquiry is made on your business credit report and it is used to make the loan decision. In addition, the credit you obtain will be reported to commercial reporting agencies.
It is important to note that when applying for financing and credit using your business credit, you should NOT provide your social security number on the application, even if it is requested.
When you do this, you CANNOT take out any personal credit because the lender cannot take your personal credit without your SSN.
These are cash advances, so the rates aren’t great, they range from 8-45% depending on risk, and you’ll typically be approved for repayment in 6-18 months.
Once you prove yourself with your first trailer, the terms will get MUCH better in future trailers. This is why we found that over 70% of those who get their first advance come back and get more money on an ongoing basis.
This forces them to only get your EIN credit since you provided your EIN, not your SSN.
This means you will be approved ONLY based on the merits of your BUSINESS credit report… your personal report is not even reviewed.
