One of the main challenges undocumented business owners face in the US is the limited access to funding opportunities to run and grow their businesses. The lack of credit history and a Social Security Number (SSN) are major obstacles for undocumented immigrants seeking financing.
Fortunately, several innovative lenders offer ITIN loans to undocumented immigrants in the US with an ITIN number. Nonetheless, many immigrants coming into the US are not aware of this. Regrettably, many who know about ITIN loans are not taking full advantage due to misconceptions that ITIN loans are expensive or unsafe.
We’ll explain what ITIN loans are further.
What Is An ITIN Loan?
ITIN loans are loans that are advanced by financial institutions to immigrants and undocumented members of the society who are ineligible to get a Social Security Number (SSN) but have an ITIN number.
Advantages And Disadvantages Of Getting Funding Through ITIN Loans
Advantages
1-. Access to credit without a Social Security Number (SSN)
With ITIN loans, immigrants can access funding to grow their business even if they’re not a US citizen or a resident alien with a green card. The ITIN number allows you to participate in the US economy by obtaining financing even if you don’t qualify for a Social Security Number (SSN).
2-. An online application process
An easy online application process with flexible requirements is friendly to small businesses. You can apply for an ITIN number and ITIN loans online. The application process is quite straightforward and requirements flexible. There’s a host of digital lenders such as Camino Financial who have a fairly simple and transparent online ITIN loan application.
3-. Scale your business faster
ITIN loans are a better funding option to scale your business faster than depending on your savings and business sales proceeds alone. It’ll take you longer to save, and growth opportunities could pass you by in the meantime.
4-. Cheaper than “hard money” loans
ITIN loans are cheaper than “hard money” loans. Hard money loans are advanced against property as collateral and are more costly when compared with ITIN loans or a conventional mortgage.
5-. Building your credit score
You can build your score once you get an ITIN loan, even if you do not have a Social Security Number (SSN). When you successfully repay ITIN loans according to the borrowing terms, you improve your credit score. A higher score allows you to borrow bigger loans for future business expansion.
6-. Refinancing your mortgage
You can take an ITIN loan to refinance your fixed-rate mortgage. You can benefit from an ITIN loan with lower interest rates to settle an expensive long-term existing mortgage loan.
Disadvantages of getting funding through ITIN loans
-.Time-consuming process
The process of obtaining an ITIN number is pretty simple, with paperwork available in English and Spanish. However, you need to wait for the IRS to process and approve your Form W-7. Typically, the process takes between 4-6 weeks. This might be too long if you require urgent funding. Moreover, if you aren’t used to it, you may find government forms challenging to fill out.
-.ITIN number application may be declined
If the documents attached to your W-7 ITIN number application form are unacceptable or if the application form is not well filled, your application for an ITIN may be declined.
-.Relatively higher interest rates
Some ITIN loans are expensive. Nevertheless, certain lenders like Camino Financial have found creative ways to offer ITIN loans at competitive interest rates.
-.A limited number of lenders offering ITIN loans
Compared to traditional banks, fewer financial institutions offer ITIN loans depending on your location. The good news, however, is that the number of lenders offering ITIN loans is on the rise.
Why An ITIN loan Is Perfect For Undocumented Business Owners In The US
An ITIN loan enables undocumented migrants who are ineligible for the Social Security Number (SSN) to pay their taxes, open business accounts, and apply for funding to support their businesses.
Obtaining an ITIN loan for undocumented immigrants
Getting an ITIN loan for your business as an undocumented immigrant involves the following steps:
- Registering for an ITIN number
- Register your business as a DBA
- Opening a business account with your bank
- Evaluate the various entities that offer ITIN loans in the market
- Assess whether you qualify for the ITIN loans advertised by various lenders
- Make an online application for funding.
- Repay the loan as per the terms agreed with your lender after you’ve received the funds. This helps build your credit score.
Lenders like Camino Financial have a simple online application process and flexible terms that allow you to apply for an ITIN loan even without a credit history.
Conclusion
As an undocumented immigrant or a minority business owner, you can apply for financing in the US even without an SSN. With an ITIN number, you can open a bank account and get funding to expand your business. Reach out to ITIN loan lenders and apply today to give your business a shot in the arm.