Launching a business is exciting, but financing can be tricky — particularly when you lack income. Most lenders require evidence that your business generates revenue before granting a loan. But what if your company hasn't begun generating income yet? The positive aspect is that you can still obtain funding effectively. The essential approach is to showcase your business persuasively, investigate different funding alternatives, and confirm you possess the required paperwork.
This article will discuss how to obtain startup business loans with no revenue and the actions you should follow to enhance your likelihood of getting approved.
A business loan with no revenue is intended for startups without a history of financial performance. They don’t depend on income but emphasize your business's potential and financial condition.
Higher risk for lenders. Since your business isn’t generating income yet, lenders take on more risk when funding you.
Approval criteria differ. Rather than focusing on business income, lenders will evaluate factors such as your credit rating, business strategy, sector, and individual finances.
A strong application is key. Even without income, a solid business plan, good credit, and thorough preparation can significantly improve your chances of getting approved.
If you have a startup, smaller banks are a better option for funding. Around 66% of small banks lend to startups, while only 54% of large banks do. Big banks rely more on credit scores, making approval harder for new businesses.
Convincing lenders to fund your business without existing capital is no small task. Without revenue, they need to see other signs of financial security. How to get a startup business loan with no money?
Having a prepared Loan Agreement Template can simplify the lending process. This document details repayment plans, interest rates, and other critical information.
Get your loan agreement template now
How to get a business loan with no revenue? Preparation is everything. Before applying, ensure you have a well-structured plan and all required documents.
A thoughtfully designed business plan demonstrates to lenders that you possess a clear path to profitability. Be sure to include:
Lenders will assess your credit since your business is new. Here’s how to improve your score before applying:
Requesting more than one no money down business loan or numerous credit cards may negatively impact your rating.
Using assets like property or equipment as collateral improves your chances of approval. Some lenders may require a personal guarantee if you don't have collateral.
Personal guarantees can be risky. Only agree if you’re confident in repaying the loan.
Now that your application is strong, what are your financing options?
1. SBA Loans (Small Business Administration Loans)
2. Microloans
3. Business Credit Cards & Lines of Credit
4. Crowdfunding & Alternative Lending
You're ready to apply for the starting business loan! What steps can you take to increase your chances of approval?
Gather all necessary documents. Have your business plan, credit reports, income details, and funding requirements ready.
Choose the right lender. Some lenders are supportive of startups, whereas others concentrate on established companies.
Write a compelling application. Highlight your business potential, projected revenue, and repayment plan. Make it clear why you’re a viable applicant.
Being rejected doesn’t mean it's over. Instead of giving up, take these steps:
Numerous thriving companies faced challenges in obtaining funding before finding investors.
Getting no revenue business loans is challenging but achievable. Enhance your credit, develop a robust business plan, and investigate funding alternatives to boost your chances. Every thriving business has to begin at some point — don’t allow insufficient funds to hold you back! Using the correct strategy, you can obtain the funds needed to realize your concept.
Article by
Daria Rubanka
Daria Rubanka is a Content Specialist at Loio, where she creates various types of content, including blog posts and template descriptions. Daria's role is crucial in delivering high-quality, informative content that simplifies legal matters for Loio's users.