Getting a business loan with no revenue might seem impossible, but it’s not as hard as you think. More than 31.7 million small businesses in the U.S. represent owners who took the necessary steps to get their start.

Of course, finding the right financing options is crucial to getting your small business off the ground. Knowing which type of loan will work best for your business at any given time is significant.

In this piece, we will dive into priceless information for business owners looking for financing, including:

  • What financial tools and business loans with no money, low income, or no revenue are available
  • How to get a small-business loan with no money or revenue
  • Why should you get a business loan with no money
  • Alternatives to getting a business loan with no money
  •  

Let’s get started!

Business Loans with No Cash, Low Income, or No Revenue

 

With little money, it’s unlikely that you’ll be able to get an SBA or conventional term loan. But even without income or cash in the bank, you might be able to access some additional forms of funding. For example, if you are borrowing for your startup, you can use your credit card for financing. 

Credit card use will cost interest, but at least you have credit available and can charge up front as needed. Responsible credit utilization is an essential part of small business ownership. 

Business owners may also consider taking on personal debt from family and friends if they are willing and can afford it. However, if these options aren’t a fit, the resources below may be proper tools for your business.

Business Credit Cards

 

Using a business credit card responsibly can raise your credit score and make you more eligible for future company loans (which, in large part, means paying your credit card bills in full and on time every month).

Credit card companies care about cash flow, but many are more interested in your creditworthiness. You’ll probably need good personal credit to be eligible for most business cards (a FICO score of 690 or higher). Businesses with no revenue can even benefit notably from using business credit cards. They can use these cards to finance their startup business expenses. But beware: carrying an unpaid balance will lead to an interest charge that is often significantly higher than what they might otherwise pay.

Responsible credit usage is invaluable for entrepreneurs, and banks want creditworthy clients.

Equipment Financing

 

A standard term loan is underwritten somewhat differently than an equipment loan. The lender, using the equipment as collateral, will front up to 100% of the cost of the item.

As a result of this difference, lenders tend to have as great a concern for the value of the equipment as they are with the company’s financial stability. Your personal and corporate credit histories, the number of years the equipment has been in use, and how well the equipment fits into your overall business plan all affect the terms of an equipment loan. However, a small part is played by cash flow. 

The existence of assets that can be used as collateral is what matters. When possible, you can avoid paying any cash upfront by using those assets to help secure the financing. These assets can be either fixed assets like buildings or inventory like furniture.

There are other options like microloans available.

Microloans

 

Microloans are smaller loans, usually up to $50,000 or less. Small businesses with no money or revenue often value the low-interest rates of these options. Microloans are often available to companies in underserved areas as well. 

To qualify for one of these loans, you will need a personal guarantor willing to be responsible for the repayment should you default on your loan. You may also need collateral like stocks or bonds if you do not have other assets. 

However, microloans can provide an excellent opportunity for startups without revenue as they can help you establish credibility and provide access to much-needed capital.

How to Get a Small-Business Loan with No Money or Revenue

 

Businesses require financing for a variety of reasons, but all lenders want you to be able to pay back their loans. However, there are still options for getting a company loan if you don’t have enough revenue to convince a lender that this will happen. These loans can provide funding for the startup or help buy equipment and inventory without spending your funds. 

It begins with having an earnest look at your business transacting to get a clear sense of your assets.

 

Assess your Assets

 

Lenders face a risk each time they make a loan. Banks will seek proof that a borrower can pay off the obligation entirely. Lenders frequently base their decision on your ability to generate income. 

If you aren’t, think about what other advantages you can provide a lender, such as collateral or credit, to make you seem like a safer borrower. As a result, creditworthy borrowers are more likely to get the financing they need.

Consider ways to minimize risks for yourself and work with a lender who understands your situation.

Determine Whether You’ll Be Able to Repay Based on a Lender’s Requirements

 

Lenders tend to publish their loan requirements. Therefore, recognizing whether you meet these requirements and can make timely repayments is essential. 

Before even considering issuing a loan, many lenders require that borrowers have a specific quantity of money in their business bank accounts. However, if applicants match specific criteria or have excellent personal creditworthiness, other lenders are a little more understanding of cash flow. 

Getting your start in business can be challenging. However, even before you have the cash flow, you may have revenue that can responsibly support a small business loan with no income. 

Before applying, make sure you understand what a lender is seeking.

Why You Should You Get a Business Loan with No Money

 

In some exceptional circumstances, it makes perfect sense to apply for a company loan even with little to no income. 

Many organizations operate on a contract basis, and payment is occasionally delayed for several weeks or months after services are provided. Nevertheless, these businesses are still stable entities that often need financial tools. 

A business loan with no money makes sense in these cases.

Alternatives to Getting a Business Loan with No Money


An alternative to a business loan with no money might be suitable if you’re a pre-revenue startup.

Consider zero-debt financing methods, such as equity offerings or crowdfunding, if you’re a startup without revenue.

Check to see if you can be eligible for a small-business grant if your company is more established. Although funding is available, not every business will use it because of the tremendous rivalry for this free money.

Conclusion


Partnering with the team at Small Business Bank can put you in touch with professionals who get it. Making the best choices to get your start in business, cut costs, or keep your company running smoothly means you need a bank that suits your needs.

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