Starting a business can be as exhilarating as it is daunting, especially when your bank balance doesn’t match your ambitions. Every great business has to start somewhere—even industry giants like Apple and Amazon began their journeys in garages. Many successful startups started from little or no financial backing, proving that great ideas and determination can go a long way.
But when it’s time to scale your dream into a profitable reality, securing the right funding is often the key to unlocking your business’s potential. If you’re wondering whether you can get a startup business loan with no money, the answer is yes—but it’s not without its challenges and considerations.
This guide explores your options for securing funding, advice on preparing for the process, and alternative methods if loans aren’t the right fit for your needs.
Finding Startup Business Loans with No Revenue
Securing a loan for a new business is more challenging than funding for established companies with proven revenue streams. Traditional lenders, like banks, typically prioritize businesses with strong financial histories. However, several funding options specifically cater to startups, even without existing revenue.
Here are two potential funding avenues to consider as a brand-new business with no money or revenue.
1. Equipment Financing
For startups requiring physical assets to operate—whether it’s machinery, tech, or manufacturing equipment—equipment financing can be a game-changer.
What is equipment financing?
With equipment financing, the loan you secure is tied to the equipment you’re purchasing. This collateral reduces the lender’s risk. Some equipment lenders don’t set minimum revenue or time-in-business requirements, making it an option for new startups.
What’s the catch?
To qualify, you’ll typically need a strong personal credit score. If approved, the equipment itself secures the loan, and payments are made over a fixed term.
2. SBA Microloans
The Small Business Administration (SBA) microloan program provides loans of up to $50,000 for small businesses and certain nonprofits. These loans are designed to help underserved communities and are distributed through nonprofit and community-based lenders.
What makes SBA microloans unique?
Some nonprofit lenders are willing to work with entrepreneurs who lack significant revenue. Factors, such as your credit score, personal finances, or business plan, may be reviewed instead. While you might not need active cash flow, some lenders still require collateral or a personal guarantee.
Pro Tip: Even for highly specific programs like this, it’s helpful to prepare a clear, professional business plan. This increases your credibility and makes lenders more comfortable offering favorable terms.
How to Apply for Loans Without Revenue
If you’re set on applying for a startup loan, take these steps to improve your chances of success, even with no current income.
Decide How Much Money You Need
An important step in securing financing is determining how much money you need to borrow. Lenders offer different funding ranges, so having a clear estimate will help you find loans that align with your startup’s financial requirements.
Determine Your Timeline
How soon do you need the loan? If speed is critical, you may need to consider options like business credit cards or short-term lenders, which can often deliver funds within days. On the other hand, some loans, like SBA microloans, could take weeks or months to process.
Create a Budget
Crunch the numbers to determine your monthly repayment ability. Loan calculators can help you compare monthly costs, interest rates, and overall affordability. Remember to look out for potential hidden fees or penalties within loan terms.
Exploring Alternative Financing Options
Loans may not always be the most accessible or appealing solution for startups with no money. Fortunately, there are creative financing methods worth exploring.
1. Crowdfunding
Crowdfunding leverages the power of online communities to raise funding for your business. Platforms like Kickstarter, GoFundMe, and Indiegogo allow startups to appeal directly to supporters.
- Reward-Based Crowdfunding offers incentives for contributions, such as exclusive products or experiences.
- Equity Crowdfunding allows you to sell shares of your business to investors in exchange for funding.
- Donation-Based Crowdfunding focuses on raising funds from generous backers who want to support your mission.
2. Business Credit Cards
For startups without significant revenue, a business credit card can be a flexible financing tool. Depending on your creditworthiness, you may qualify for cards with low interest rates or helpful perks like travel rewards.
If you have poor or no credit history, consider secured business credit cards that require a deposit but can gradually improve your credit score with responsible use.
3. Grants
Grants provide funding that doesn’t need to be repaid, making them a highly attractive option for startups. However, competition is intense, and applying for grants often requires a compelling proposal highlighting your business’s potential to make an impact.
Popular small business grant sources include the SBIR grants (for research-based businesses) and private foundations supporting specific industries.
4. Family & Friends
Borrowing from loved ones can be a viable option if traditional funding channels aren’t available. This arrangement comes with increased personal risks, so ensure expectations and repayment terms are clearly communicated to avoid damaging relationships.
Why Alternative Financing Might Be a Better Fit for Startups
Although loans can be useful, they often come with financial obligations you must repay quickly. On the flip side, alternative methods like crowdfunding or grants allow startups to raise funds without incurring debt.
For many entrepreneurs, combining multiple funding methods—such as using a mix of a small loan, crowdfunding, and a personal investment—creates the best overall strategy for sustained growth.
What’s Next For Your Business?
Launching a startup is no small feat, especially when finances are tight. Whether you pursue a loan, explore alternative funding options, or a mix of both, success starts with preparation and persistence.
To increase your chances of obtaining funding, take the time to build a solid plan, demonstrate your business potential, and showcase your determination. Remember, countless businesses started from a simple idea—just like yours—and rose to extraordinary heights with the right resources.
If you’re still exploring financing options, don’t hesitate to contact professional advisors or funding consultants who can help you choose the best path forward.