How To Get a Startup Business Loan With No Money


Securing a startup business loan without revenue can be challenging, but it’s not impossible. This article delves into various financing options available for startups, the prerequisites for each, and the potential risks and benefits. Whether you’re a budding entrepreneur or an established business owner, understanding these options can pave the way for your venture’s success.

Starting a business is an exciting endeavor, but it often comes with financial challenges. One of the most common hurdles startups face is securing funding, especially when they have no revenue. Traditional loans will typically require some type of credit history, business history, and, most importantly, money down. While traditional loans might be out of reach, several alternative financing options can help get your business off the ground. For you entrepreneurs looking to turn your blood, sweat, and tears into reality, here is your comprehensive guide to getting loans with no money down.

Understanding your financing needs

Before diving into the available loan options, it’s crucial to assess your business’s financial needs. Determine how much funding you require, the purpose of the loan, and how you plan to repay it. This clarity will not only help you choose the right financing option but also make your application more appealing to lenders.

Tried-and-true strategies for startups without revenue

Business credit cards

Business credit cards can be a viable option for startups. They can help in building a credit history, managing cash flow, and even earning rewards. However, it’s essential to use them responsibly to avoid accumulating debt. Remember, credit cards exist to charge you a high interest rate on the debt you accumulate.

Equipment financing

If your startup requires specific equipment, consider equipment financing. Here, the equipment itself serves as collateral, reducing the lender’s risk. Ensure the equipment is essential and can generate revenue to make this option viable.

Invoice financing

For businesses that operate on an invoicing system, invoice financing can be a lifesaver. This method allows you to get an advance on your unpaid invoices, providing immediate cash flow. Many businesses that are involved in trading will have some sort of invoice financing platform setup, if they have a track record with customers.


Microloans are small loans offered by nonprofit lenders. They are designed for startups and small businesses, often with more lenient qualification requirements.

Alternative ways to get a business loan with no money down

Sometimes, a seller just needs to sell, and they will give options that otherwise might not be on the table to an interested buyer. There are some other ways to secure financing with no money down, including the following:

Identify motivated sellers

Target businesses with owners eager to exit. This could be due to impending retirement, health issues, or prolonged sale periods without buyers. A motivated seller is more likely to consider seller financing.

Engage a business broker

Local business brokers, also known as “business intermediaries,” can be invaluable. They have connections with numerous potential sellers and can help pinpoint businesses where the owner might be open to flexible terms.

Opt for underperforming businesses

Some businesses might be underperforming due to outdated technology or ineffective marketing strategies. If you believe you can revitalize such a business, the owner might be more willing to negotiate favorable terms.

Negotiate better terms with higher interest

If a seller is hesitant about full seller financing, consider offering a higher interest rate. This can be particularly effective with underperforming businesses, where you might initially work without pay but eventually see profits as the business improves.

Consider a silent partner

If the seller isn’t open to full financing, think about bringing in an investor as a silent partner. Alternatively, the seller might be interested in retaining a stake in the business, benefiting from its future success without being actively involved.

Crowdfunding as a last resort

If traditional methods don’t pan out, consider crowdfunding. This approach allows you to raise capital directly from the public, either by offering equity in your business or through debt crowdfunding.

Strategies to secure a loan without revenue

Highlight your assets

In the world of business financing, revenue isn’t the only factor that lenders consider. While a consistent revenue stream is undoubtedly appealing, other assets can significantly bolster your loan application. For instance, tangible assets like property or equipment can serve as collateral, providing lenders with a safety net should repayments falter. Additionally, a well-researched and robust business plan can demonstrate your commitment and vision, showcasing the potential profitability of your venture. By emphasizing these assets, you can paint a more comprehensive picture of your business’s value and potential, making your application stand out even in the absence of revenue.

Pro Tip

When seeking a business loan, consider leveraging your business’s future revenue. Some lenders offer “revenue-based financing,” where repayments are a percentage of your monthly sales. This approach can be beneficial for startups with fluctuating income, ensuring repayments align with actual revenue.


Understand lender requirements

The business lending landscape is vast, with each lender bringing its own set of criteria and expectations. Some might prioritize credit scores, while others might place more weight on business experience or potential growth. It’s crucial to do your homework and understand what each lender values most. By aligning your application with a lender’s specific requirements, you can increase the likelihood of approval. This might mean emphasizing certain aspects of your business, providing additional documentation, or even seeking out lenders whose criteria match your business’s strengths.

Looking for a business loan? Here are some options below:

Assess your repayment capacity

Securing a loan is just the first step; repaying it is the real challenge. Before approaching lenders, it’s essential to have a clear and realistic plan for repayment. This involves analyzing your projected cash flows, understanding your monthly expenses, and ensuring that you can comfortably manage loan repayments without jeopardizing the financial health of your business. Lenders want to minimize risk, and showing them that you’ve thoroughly assessed your repayment capacity can provide the assurance they need. It demonstrates responsibility, foresight, and a commitment to honoring your financial obligations.

How business loans work

So, do you think you are ready to take on debt? Just make sure you can pay it back. Here is a simple breakdown of what a business’s profit and loss might be:

  • Loan amount: $100,000
  • Interest rate: 6% per annum
  • Loan term: 5 years
  • Monthly repayments (principal + interest)
  • Business revenue growth: 10% annually
  • Initial monthly revenue: $10,000
  • Monthly operating expenses (excluding loan repayment): $8,000
Year Monthly Revenue Monthly Operating Expenses Monthly Loan Repayment Monthly Net Profit/Loss Cumulative Profit/Loss
1 $10,000 $8,000 $1,930.28 $69.72 $836.64
2 $11,000 $8,000 $1,930.28 $1,069.72 $12,836.64
3 $12,100 $8,000 $1,930.28 $2,169.72 $26,036.64
4 $13,310 $8,000 $1,930.28 $3,379.72 $40,536.64
5 $14,641 $8,000 $1,930.28 $4,710.72 $56,736.64

So, should I even attempt a business loan with no money down?

If your business needs money, and you have no money, then of course you should! If you have some capital in the bank and are weighing your options, consider the following:


Considering a startup business loan without revenue? Here are the pros and cons.

  • Immediate access to capital
  • Opportunity to build credit
  • Flexible repayment options
  • Potential for high-interest rates
  • May require personal guarantees
  • Debt accumulation risk

What do the experts say?

Different people will have different opinions on starting a business with no money down. We spoke to some experts to get their advice. Gary Hemming is an experienced financial expert hailing from the UK. He says, “Starting a business with no money down can be difficult, but it is possible. One way to do this is to look for free or low-cost resources to help you get started.”

Michael Martin, a seasoned entrepreneur and the founder of RPG Overload, advises people to follow a “lean business model,” starting small with a service-based business that requires minimal upfront costs. These techniques may help:

  • Bootstrapping: Utilize personal savings and reinvest profits to fund initial operations.
  • Partnerships: Collaborate with others who bring complementary skills or resources.
  • Freelancing: Offer your skills as a freelancer or consultant to generate income for your business.


Are there lenders who specialize in startups without revenue?

Absolutely. There are numerous lenders who recognize the potential of startups and are willing to support them, even in the absence of revenue. These lenders typically have a deeper understanding of the startup ecosystem and offer financial products designed to address the specific needs and challenges faced by early-stage businesses.

Is collateral always required for such loans?

No, collateral is not always a prerequisite. While having collateral can certainly bolster your loan application and potentially secure better terms, there are several lending options available that don’t mandate it. For instance, unsecured business loans, certain microloans, and some crowdfunding platforms might extend funds without requiring collateral. However, it’s essential to note that these options might come with higher interest rates or other conditions.

How can I improve my chances of loan approval?

Maintain a good personal credit score, present a solid business plan, and consider offering collateral or a personal guarantee. This article should give you a pretty comprehensive guide on how to improve your chances. Remember, understanding what the lender is looking for is half the battle.

Key takeaways

  • Startups without revenue have several financing options.
  • Assessing your financial needs is crucial before seeking a loan.
  • Different lenders have varied requirements; research is key.
  • Always weigh the risks and benefits of taking a loan.
View Article Sources
  1. How to Get a Startup Business Loan with Bad Credit – SuperMoney
  2. Small Business Loans – SuperMoney
  3. Unsecured Business Loans: Collateral-Free Cash – SuperMoney
  4. Business Loans for Bad Credit – SuperMoney
  5. How to Get Approved for a Business Loan: Top 5 Reasons Business Loans Are Denied – SuperMoney
  6. Business Loans for New Businesses: Everything You Need to Know – SuperMoney
  7. Funding Programs – Small Business Administration
  8. Small Business Resources –