Sonar supports loans where the borrower of record is a business entity — an LLC, corporation, partnership, or trust — rather than an individual. This article covers adding an entity borrower, linking the people who sign on its behalf, how title is vested, and what works differently on an entity loan.
Note: Entity borrowers are added in Sonar by your team. A business or trust cannot be entered by a borrower through the online application.
Before you start
You choose Individual or Business once, when the borrower is first added. The Borrower Type control only appears while you are adding a borrower — once saved, the type cannot be switched. If you pick the wrong one, remove the borrower and add them again.
Adding a business entity borrower
There are three places you can do this:
The Create Loan wizard, at the borrower step
The Borrowers tab — click Add Borrower on the borrower card
The Borrowers tab — click Manage Borrowers, then Add Borrower
In the dialog, set Borrower Type to Business. The field set changes to:
Business Legal Name | The entity's full legal name, exactly as it appears on its formation documents. This is the only required field. |
Entity Type | LLC, Corporation, Partnership, Trust, Non-Profit, and so on. Choosing Trust reveals two extra fields — see below. |
EIN | The entity's tax ID. It is masked once saved and reveals when you click into the field. |
State of Organization | The state the entity was formed in. This feeds the vesting description. |
Authorized Representative Name and Title | The person who signs for the entity and their capacity — for example Managing Member or President. |
Contact details | Address, cell phone and email. Email is optional for an entity, even if your company normally requires it. |
Note: Entity Type is required when you add a borrower through Manage Borrowers, but optional in the other two places. We recommend filling it in every time — it drives vesting, pricing and the trust fields.
Trusts: two extra fields
When Entity Type is set to Trust, two more fields appear:
Trust Classification — Living Trust, Land Trust, Community Land Trust, Illinois Land Trust, Native American Land Trust, or Other
Trust Agreement Date — the date the trust was executed. This appears in the vesting description.
Borrower pairs
A business entity must sit in the primary slot of its borrower pair. If you try to save with an entity in the second slot, Sonar blocks the save with "A business entity must be the primary borrower on its pair."
If you drag an entity into the second slot, Sonar moves it back to the primary slot for you and tells you it did: "A business entity must be the primary borrower — it was moved to the primary slot."
Because of this rule, two entities cannot share a pair. Put each entity in its own pair.
Adding the people: trustees and guarantors
The people who sign for or back an entity are added as Individual borrowers, then linked to the entity.
Add the person as a borrower, with Borrower Type set to Individual.
Set their Role — Guarantor for someone personally backing the debt, or leave them as Borrower if they are also applying in their own right.
In Acts For (Guarantor / Trustee of), select the entity they act for. You can do this from either the person's record or the entity's.
Sonar works out the capacity from the entity: link someone to a Trust and they become a Trustee; link them to any other entity and they become a Guarantor. The link shows on the borrower card as a pill such as Doe Family Trust — Trustee.
Note: Link at least one trustee to every trust before requesting signatures. A trust with no linked trustee has nobody to sign on its behalf.
Who counts where
Roles decide far more than a label. This is how each one is treated:
Role | Credit pulled | Counts in DTI | On the 1003 | On the HMDA report |
Borrower / Co-Borrower | Yes | Yes | Yes | Yes |
Co-Signer | Yes | Yes | Yes | Yes |
Guarantor | Yes | Yes | No | No |
Trustee | No | No | No | No |
Non-Title Holder Spouse | Yes | Yes | No | No |
Business entity | No | — | Yes, as the applicant | Yes, with demographics reported as Not Applicable |
The two worth remembering: a Guarantor does have credit pulled and does count toward DTI, even though they never appear on the 1003. A Trustee does neither — they sign for the trust, they do not qualify for the loan. If a trustee is also applying in their own right, add them with the role Borrower instead.
How title is vested
Vesting lives on Transaction → Title, in the Vesting field. The field has a link that toggles between Auto-calculate and Edit manually.
Auto-calculate builds the description from the entity and its linked people, and locks the field. For a trust it reads like Jane Doe and John Doe, Trustees of the Doe Family Trust dated 03/14/2019. For an entity holding title it reads like Acme LLC, a Texas Limited Liability Company.
Edit manually unlocks the field so you can type the vesting exactly as your title company requires.
Anything you type manually is what Sonar uses — a manual entry always wins over the auto-calculated version.
Certification of Trust
There is a Certification of Trust document category for filing the executed certification on the loan. Upload the document on the Documents tab and set its category to Certification of Trust. Sonar does not generate this document for you.
What works differently on an entity loan
Borrower portal | An entity is not invited to the portal. Invite Borrower lists only the people on the loan, such as a guarantor or trustee, and is hidden when there are none. |
Consents and demographics | Not collected for an entity. Demographics are reported as Not Applicable on the HMDA report. |
Credit | Entities and trustee-only signers are not listed in the Order Credit dialog. If nobody on the loan is eligible, you will see: "Credit is pulled for individual borrowers of record only. Business entities and trustee-only signers are excluded. Add a borrower, co-signer, or guarantor to order credit." |
AUS | Not available. The AUS tab shows: "Automated underwriting (DU/LPA) supports individual borrowers only — a loan with a business entity borrower must be underwritten manually." |
Names on documents | The entity's legal name is used wherever a borrower name appears — the loan header, the pipeline, the 1003, letters and worksheets. |
FAQs
I added a borrower as an Individual but they should be a Business. Can I switch?
No. The Borrower Type is set when the borrower is added and cannot be changed afterwards — switching would discard the entity details. Remove the borrower and add them again.
Why can't I order credit for the LLC?
Credit is pulled against a Social Security number, and an entity has an EIN. Add the individuals who back the loan — a borrower, co-signer or guarantor — and order credit for them.
Why is Run AUS unavailable?
DU and LPA accept individual applicants only. A loan with an entity borrower is underwritten manually.
My guarantor's credit was pulled — is that right?
Yes. A guarantor is personally backing the debt, so their credit is pulled and their income and liabilities count toward DTI. They just don't appear on the 1003 as an applicant.
The 1003 shows the EIN in the Social Security Number boxes. Is that a problem?
No. The URLA form has no separate EIN field, so the number is placed in the SSN boxes. The EIN is correct, and it appears in its normal format everywhere else in Sonar.
Can a business or trust apply through the online application?
Not currently. Entity borrowers are added in Sonar by your team.
Questions? Contact us at [email protected].