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Can You Get Startup Business Loans with No Money?

Updated on:
Content was accurate at the time of publication.

It is possible to get startup business loans with no revenue, profits, cash flow or assets. But just because you can get a business loan with no money doesn’t mean it’s the best option. If you can afford to wait until your business is more established and generates some money, you may find funding options that offer more attractive interest rates and repayment terms.

If you’re a startup business or a business that doesn’t have much cash flow yet, you’re likely not going to qualify for a business loan from a traditional brick-and-mortar bank or an SBA loan. But, there are other business financing options you can explore. However, even if the business lender doesn’t require your business to have much revenue, it’s important to consider how you plan to repay the loan.

  Equipment financing

If you need to purchase expensive equipment for your business, equipment financing might be an option for businesses with no revenue yet. These loans are based on the value of the equipment, not your revenues. And because the equipment itself acts as collateral — or security — for the loan, business lenders may be willing to lend to startups.


Microloans are loans up to $50,000 that are specifically designed for startups with small funding needs. Because they are geared for startup businesses, they may not have revenue requirements to apply. Microloans are available from the SBA, as well as other government, nonprofit and peer-to-peer agencies.

  Small business credit cards

Business credit cards function like personal credit cards, allowing you to borrow up to a predetermined credit limit. Some may have useful perks for startups such as cash back on office supplies, but it’s best to pay your balance in full each month in order to avoid interest charges. Eligibility for business credit cards is based on your credit score, as well as future revenue.

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Applying for a small business loan is a straightforward process.

Some things to keep in mind before you start:

1. Understand lender requirements

Lenders evaluate a prospective borrower’s credit history, collateral availability, capacity to repay from future revenues or savings, and length of time in business. Review each lender’s criteria before you take time to apply.

2. Know your cashflow and assets

Lenders want to understand where the money for loan interest and repayment will come from. Be able to explain this by creating a budget for future cash flows and assets.

3. Be prepared to sign a personal guarantee

Startup lenders frequently require a personal guarantee from the company’s owners. Understand the risks of signing a personal guarantee: You could lose your home, car and savings if the business defaults on the loan.

4. Decide what you can afford to repay

Keeping up with loan payments is critical even if your startup costs are higher than expected. Loan payments are based on the loan amount, interest rate, repayment frequency and total time to repay the loan. If your expected payment is more than you’re certain you can afford, find a loan that is more favorable on one or more of these factors.

While more choices and better terms are available to small businesses that already have money coming in, it can still make sense to seek a startup business loan with no revenue in some cases.

  You’re trying to get your business off the ground

Most businesses need some money to open their doors — for rent, inventory, equipment, payroll and other expenses of operation before you generate sales. If you foresee a short timeframe to ramp up income for loan payments, it may be worthwhile to borrow money.

  You need the money to grow

When a business is growing, you may need money to fund additional facilities, inventory, payroll, working capital and more. If you haven’t accumulated much in the way of savings yet, loans could help act as catalysts for your business growth.

  You are waiting to get paid

Not every business is “cash and carry.” In many businesses, customers expect you to send an invoice which they may not pay for several weeks. If you have cash locked up in unpaid invoices, “factoring” or accounts receivable loans can help you convert them into cash. You’ll sell a portion of your invoices to a factoring company in exchange for an advance of a portion of the invoice.

See Small Business Loan Offers

If you don’t have much revenue but don’t want to take out a business loan, there are some other ways to consider getting funding.

Early stage businesses

Startups who are not yet earning revenue may be able to obtain funds through venture capital or crowdfunding.

  • Venture capital is money invested in a startup in exchange for a piece of ownership in the business. No interest is charged or repayment required, which may make this method of funding attractive, but be aware that you are effectively giving up a portion of equity in your business. Venture capital investors look for companies that will quickly grow in value and can be sold, giving them a large profit.
  • Crowdfunding is when you solicit donations from friends, family and community members to support your business. You don’t give up equity as a part of crowdfunding, but it may be challenging to break through and obtain the necessary amounts you need.

Established businesses

If your business is more established, you can apply for small business grants. Grants are free money that doesn’t need to be paid back, and the awarding organization takes no ownership in the business. Depending on your business, there may also be additional minority business grants available.

Yes, there are several types of startup business loans with no collateral requirement. Lenders may focus instead on credit score, expected future cash flows and a personal guarantee.

Yes, there are lenders who specialize in providing business loans for companies with limited or bad credit history. As a tradeoff, you should expect higher interest rates and shorter repayment terms for these loans.

A lender’s chief objective is timely repayment of the loan with interest. To make those payments requires cashflow from somewhere — either the business or you personally. So, while it is possible to get a startup loan with no money, assets or collateral, you need to carefully consider your repayment obligations before signing on the dotted line.

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