How to Get a Startup Business Loan With No Money?

How to Get a Startup Business Loan With No Money? was originally published on The Muse, a great place to research companies and careers. Click here to search for great jobs and companies near you.

You’ve got a great business idea and a clear vision of how you want to build it. Now, all you need is the capital to make that happen—because unfortunately, you don’t have any. It’s a tough situation. How do you start a successful business without cash? You might consider getting outside funding—and that may (or may not) involve figuring out how to get a startup business loan with no money.

Let’s take a look at everything you need to know about business loans for startups—how they work, whether it’s possible to secure a small business startup loan without any money or revenue, and alternative funding sources to get the capital you need to launch your business (no matter how much you have in your pocket).

How do startup business loans work?

Before we jump into how to get a business loan for a startup—even if you don’t have a ton of money to work with—let’s quickly cover how small business loans for startups work.

A business startup loan is designed to provide business owners with the capital they need to establish their startup ventures. These loans can come from a variety of sources, including banks, credit unions, online lenders, investors/venture capitalists, and the government.

To secure small business startup loans, business owners will need to fill out a loan application and present a detailed business plan. This plan should outline the company’s current financial situation, including revenue, expenses, and cash flow, as well as future financial projections. Plus, lenders will typically dig into the business owner’s finances—including their credit history.

They review all this information to assess risk, determine the applicant’s eligibility for the small business loan, and, if they opt to approve the loan, what interest rate, terms, and conditions they’re willing to offer.

Is it possible to get small business startup loans with no money?

Full transparency: For a brand new business, securing traditional business startup loans is difficult, as there’s no such thing as an easy approval of startup business loans.

“For someone just looking to start a new business from scratch, it’s nearly impossible to get a startup loan,” says Joe Camberato, CEO of lending platform

Why? “Lenders want to see sales, revenue, and at least a break-even point or a clear path to profitability,” Camberato says. When you’re new, you don’t have that information, so it can be extremely difficult to convince a traditional lender to give you a business loan.

That being said, there are steps you can take to increase the chances of getting loan approval, including:

  • Do the work on the back end. Before applying for a startup business loan, you’ll want to “develop a comprehensive business plan, prepare financial statements and projections, and improve personal credit,” says Danetha Doe, financial expert and Founder of Money & Mimosas, an organization that, since 2014, has helped entrepreneurs raise over $160 million in capital.
  • Choose the right lender. Because it can be so difficult to secure a startup business loan, you want to make sure that, when you apply, you’re going to the right lender. Do your research and “consider lenders specializing in startups or those offering alternative financing options,” Doe says.
  • Know each lender’s requirements going in. If you do decide to apply for a business loan, make sure you understand the lender’s requirements before submitting your application.

The last thing you want is to go through the entire loan application process and realize that you don’t meet the eligibility requirements; not only is it a waste of time on your end, but the lender might also see it as wasting their time—which could be a roadblock to getting funding in the future.

  • Be prepared for less-than-ideal terms. Offering startup business loans with no revenue is a major risk for the lender; they don’t really have any guarantee that your business will be successful or that you’ll be able to pay back the loan.

As such, if they do offer the loan, the terms will likely reflect that risk—for example, a higher interest rate, high penalties for missed payments, and/or shorter loan repayment terms. If you decide to go after a business startup loan, just make sure you understand that you may not get the best deal—and that you’ll need to carefully review the terms before signing on the dotted line.

  • Offer collateral. As mentioned, a startup business loan can be risky for the lender. If you want to make the loan feel less risky, you might consider offering collateral. When you collateralize a loan, you’re offering something of value (like a car or home) that the lender can seize if you default on your loan.

Now, collateral can make a loan feel less risky for the lender (as they have a way to recoup their losses should you not pay back your loan)—but it increases the risk for you as the borrower, as you put whatever you collateralize (again, like your home or car) in jeopardy if you can’t pay back the loan.

If you do get approved for a startup loan or new business, it’s important to manage the money in a way that will keep you in your lender’s good graces.

“Use funds according to your business plan, maintain meticulous bookkeeping records, focus on achieving business milestones, and communicate ongoing wins/challenges with lenders,” Doe says.

Alternatives to a startup business loans

Yes, it’s extremely difficult to get approved for traditional loans for startup business if you don’t have any money or business history. But the good news? Just because you may not qualify for a loan doesn’t mean you can’t secure the funding that you need to launch, build, and grow your new venture.

There are a number of alternatives to small business startup loans that can help you get the capital you need. For example, “personal loans, microloans, business credit cards, and crowdfunding,” Doe says.

Let’s take a look at some alternatives to startup business loans with no revenue that can help you secure funding—even as a brand new business:


If you don’t need a huge amount of capital to get your business off the ground, you might consider a microloan.

As you might guess from the name, microloans are smaller business loans—generally $50,000 or less. They are geared towards business owners that may have trouble securing traditional financing, including brand new startups. You can apply for microloans through the U.S. Small Business Administration or from nonprofit lenders like Ascendus or Justine Petersen.

Microloans often have less strict borrowing requirements, which makes them an ideal option for new business owners trying to get a startup from scratch.

“Microloans are often one of the best options due to their relatively low borrowing requirements and flexibility,” Doe says.

Just keep in mind that some microloan lenders do require some business/financial history in order to approve a loan—often between three and six months.

Personal loans

If you’re launching a brand new business, your business doesn’t have any financial history. But as an individual, chances are, you do—and you can leverage that financial history to get a personal loan to fund your business.

“Consider taking out multiple personal loans from banks or fintech lenders to get started,” Camberato says.

Just remember that when you apply for a personal loan, you, as a person—not your business—are on the hook for paying it back. That’s true whether your business takes off or doesn’t. So before you take out a personal loan, make sure that you feel comfortable with the monthly payments needed to pay it back.

Build your dream business with the help of a high-paying job—browse open jobs on The Muse »

Credit cards

Another alternative for a loan—and one that could potentially be cheaper in the long run—is getting a credit card with a low introductory interest rate.

“Look at both personal and business credit cards and take advantage of introductory rates for the first 12 months,” Camberato says.

Many credit cards offer 0% APR for 12 to 15 months—and, for some cards, that introductory rate can stretch up to 21 months. That means that for the first 12 to 21 months you have the card, you don’t have to pay any interest.

Using credit cards with a 0% introductory APR can be a great way to get your business off the ground without accruing a ton of interest—which can save you money in the long term.

If you do take out a credit card (business or personal), just make sure you use it responsibly. Only take on as much debt as you can comfortably pay back during the introductory period—and ideally, pay off your balance fully before that period ends.

Also, understand the terms of the card; while many cards start to accrue interest at the end of the introductory period, others may apply interest to the total balance if it’s not paid in full by the end of the introductory period—which could leave you with a hefty unexpected bill.

Read this next: Trying to Build Credit? What You Should Know About Credit Cards


Another way to get the money you need to start your business is to “network with potential investors,” says Doe, like VCs and individual investors. Target the ones that tend to invest in your type of business—and then work to schedule a meeting, pitch them on your investment, and ask for funding.

You could also look for investors a little closer to home. “Use friends and family as a resource and look to raise money from them,” Camberato says.

If you opt to borrow money from friends or family, be sure to treat it like a business transaction. Put everything in writing. Be clear on the terms and ensure that not only are you getting the funds you need to start your business, but that they’re getting a fair deal and return on their investment (ROI).

For example, Camberato recommends offering an 8 to 12% interest rate—which delivers a healthy ROI and gives you a more competitive rate than you’d find on the market, making it a win-win situation.

Also, it should go without saying, but don’t take money from friends or family if you think it could jeopardize the relationship in any way. For example, if loaning you the money would put them in a precarious financial situation, or if there are unhealthy relationship dynamics at play that could cause friction while you repay the loan.

Money can make people act in strange ways—and as important as your business is, at the end of the day, your relationships are even more important.


Depending on the type of business you’re starting, you may be eligible for a grant—which, unlike a loan, you don’t have to pay back.

There are a number of grants out there, both government and private, that offer funds to startup business owners (including female founders). Research available grants to see if any fit you and your business.

While grants can be hard to get, the major perk is that you’re not expected to pay back grant money—so it’s worth investing time and energy into exploring your options.

Get the funding you need to build a successful business

The truth is, there are no guaranteed small business startup loans for those with no money and no revenue. But no matter what your financial situation, there are avenues you can take to build the business of your dreams—whether that’s getting a startup loan for a new business, applying for a personal loan or credit card, or selling your vision to investors. So what are you waiting for? Get out there and get that funding!