Startup Business Loans with No Revenue

business team reading good news on a laptop


      Building a successful startup comes with its fair share of challenges, chief amongst them being the search for loans and funding.

      While chasing that dream investment, startups often face a tough time trying to secure loans, primarily due to minimal or no revenue. Understandably, many lenders find this absence of steady revenues a red flag, sometimes closing doors to potential investment opportunities. However, we’re here to tell you that lack of revenue should not necessarily be a dealbreaker for eligible startup loan candidates.

      Having no revenue at the start of your entrepreneurial journey is not an insurmountable disadvantage. In fact, many successful businesses today started from the same position.

      In this article, we’ll look at the different funding avenues open to you for kickstarting a business with no revenue.

      Types of Startup Business Loans with No Revenue

      Traditional banks might not be the most accommodating option when it comes to financing a startup with no revenue. The reason is simple: banks often perceive startups, especially those without a steady revenue stream, as high-risk investments. They prefer to lend to established businesses with a proven track record of profitability and reliable cash flow.

      However, by no means does this imply that startups with no revenue are left without options. There are several types of startup business loans suitable for those just starting out who have yet to establish a steady revenue stream.

      Let’s discuss some alternative financing options to help your startup overcome its initial financial hurdles and set the foundation for its future growth.

      business team reading good news on a laptop

      Personal Term Loans

      Personal term loans are based on the borrower’s personal credit history rather than the financial health of their business.

      Personal term loans can be a viable option for startups with no revenue. Since these loans are based on personal rather than business credit, startups can access funding even if they still need to establish a steady revenue stream. This can provide the necessary capital to cover initial business expenses and help get the business off the ground.

      Pros of Personal Term Loans

      Accessibility – They can be easier to obtain for startups with no revenue.

      No Collateral Required – Personal term loans are typically unsecured, meaning you don’t need to put up any assets as collateral.

      Flexible Use of Funds – The funds from a personal term loan can typically be used for any purpose, providing flexibility for startups to allocate the money where it’s needed most.

      Cons of Personal Term Loans

      Personal Liability – Take into account that if your new startup doesn’t work out, you, as an individual, are still obligated to pay back the loan.

      Impact on Personal Credit – And furthermore, if you have trouble paying back your debt, this could then go on to leave a stain on your credit history.

      Higher Interest Rates – As a rule of thumb, business loans tend to have more attractive interest rates than personal loans, a gap that widens if your credit score is less than perfect.

      Business Credit Cards

      Another viable option for startups with no revenue is business credit cards.

      For startups, business credit cards can be a practical tool for managing cash flow and tracking expenses. They offer the flexibility to cover costs when cash is tight and pay back when revenue comes in. Plus, the rewards and perks can help offset business expenses.

      Pros of Business Credit Cards

      Ease of Use – Business credit cards are easy to use and accepted almost everywhere, making them a convenient option for covering business expenses.

      Rewards and Perks – Many business credit cards offer rewards programs, including cash back, travel rewards, and other perks that can help offset business costs.

      Building Business Credit – Regularly using and promptly paying off a business credit card can help build your business’s credit history, which can be beneficial for securing larger loans in the future.

      Cons of Business Credit Cards

      High-Interest Rates – If mismanaged, business credit card debt can quickly pile up due to high-interest rates, especially if you only make the minimum payments.

      Impact on Credit – Similar to personal term loans, failing to make payments on a business credit card can negatively impact your personal credit score, as most card issuers require a personal guarantee.

      Fees – Some business credit cards come with annual fees, and there can be high fees for late payments or going over your credit limit.

      Equipment Financing

      Equipment financing can benefit startups that require expensive machinery or equipment to operate.

      With equipment financing, the equipment itself serves as collateral for the loan. If you default on your payments, the lender can seize the equipment to recoup their losses. This self-collateralizing nature often makes equipment financing more accessible to startups with no revenue.

      Pros of Equipment Financing

      Specific Purpose – Equipment financing is designed for a specific purpose: to help businesses purchase the equipment they need. This can make it easier to justify the loan to yourself and the lender.

      Self-Collateralizing – The equipment you purchase with the loan serves as collateral, making these loans easier to obtain, even for startups with no revenue.

      Cons of Equipment Financing

      Limited Use of Funds – The funds from an equipment loan must be used to purchase equipment. This lack of flexibility can be a disadvantage if your startup has other pressing financial needs.

      Depreciation of Equipment Value – The value of equipment can depreciate over time and may even decline faster than the loan is paid off. You could pay more for the equipment than it’s worth over the long term.

      SBA 7(a) Loans

      SBA 7(a) loans are a type of small business loan guaranteed by the Small Business Administration (SBA). They are issued by participating lenders and are backed by a guarantee from the SBA. This guarantee reduces the risk for lenders, making them more likely to lend to small businesses, including startups with no revenue.

      SBA 7(a) loans can be used for a variety of business purposes, including working capital, purchasing equipment or inventory, refinancing other debts, and even buying real estate.

      Pros of SBA 7(a) Loans

      Flexible Use of Funds – SBA 7(a) loans can be used for a wide range of business purposes, providing flexibility for startups to allocate the funds where they’re needed most.

      Lower Interest Rates – As the SBA guarantees them, these loans have fairly low-interest rates compared to other loans.

      Longer Repayment Terms – SBA 7(a) loans often come with longer repayment terms, making monthly payments more manageable for startups with no revenue.

      Cons of SBA 7(a) Loans

      Lengthy Application Process – Applying for an SBA 7(a) loan can be a lengthy and complex process, requiring a significant amount of paperwork and potentially taking several weeks or even months to get approved.

      Strict Eligibility Requirements – SBA 7(a) loans have strict eligibility requirements, including a detailed business plan, good credit, and in some cases, collateral.

      ACH Loans

      ACH loans are a type of business financing alternative lenders, banks, and other financial institutions offer. These loans are typically for larger amounts, so they can provide a substantial capital injection for startups with no revenue.

      One of the key advantages of ACH loans is their accessibility, even for those with bad credit or no credit. Many lenders that offer ACH loans have a minimum credit score requirement that ranges from 500 to 625. Some lenders might not even require a credit score review, making ACH loans a potential option for startups with limited credit history.

      Pros of ACH Loans

      Fast Funding – ACH loans can be processed quickly, providing startups with immediate access to capital.

      Accessible to Those with Bad Credit – ACH loans often have less stringent credit requirements, making them a potential option for startups with bad or no credit.

      Automated Repayments – The automatic withdrawal system simplifies the repayment process, reducing the risk of missed payments.

      Cons of ACH Loans

      Higher Interest Rates – Due to their speed and accessibility, ACH loans often come with higher interest rates compared to other types of business loans.

      Frequent Repayments – The daily or weekly repayment schedule can be challenging for businesses with irregular cash flow.

      How to Secure a Startup Business Loan with No Revenue

      Now we’ve looked at some of the best options to consider to fund your startup; let’s go into the strategy that will ensure you have the best chance to secure your financing.

      Step 1: Understand How Much Finance You Need

      Before you set the wheels in motion, you should think about how much funding you need and what you’ll use it for. While this may seem obvious, you want to get that Goldilocks amount. Don’t overstretch yourself but ensure you have enough to get your business off the ground with some additional runway.

      Step 2: Prepare a Solid Business Plan

      A well-prepared business plan is essential when applying for a startup business loan. It should detail your business model, market analysis, sales and marketing strategies, and financial projections. This will show potential lenders that you have a clear plan for your business’s success.

      Step 3: Build and Maintain Good Credit

      As we’ve mentioned already, bad credit isn’t necessarily an end to your business dreams, but it still pays to have a good credit score, as it can only increase your chances of securing a loan. Do what you can to keep your credit history in good standing.

      Step 4: Consider Collateral or a Co-signer

      Collateral can be any asset of value the lender can seize if you default on the loan. A co-signer is someone with good credit who agrees to take on the responsibility of the loan if you can’t repay it. Both these open up more options if you have access to them.

      Step 5: Research and Apply

      Once you’ve prepared everything, it’s time to research potential lenders and apply for loans. We’ve already given you the lowdown on some of the common no-revenue business start-up loans to get you started. You’ve just got to get the ball rolling.

      Alternative Ways to Raise Startup Funds With No Money

      We’ve spent a good deal of time discussing loans and traditional lending options for startups with no revenue. But it’s worth mentioning that loans aren’t the only avenue to explore. There is a world of alternative funding methods out there that operate a bit differently.

      These options can offer you more flexibility, and in some cases, they can even provide opportunities for strategic partnerships or valuable advice. So, let’s shift our focus a bit to these alternative ways to raise startup funds that could open up new possibilities for your business.


      Crowdfunding has become a popular alternative for startups to turn to when needing a cash injection for their business. Kickstarter and Indiegogo are among the leading online platforms where entrepreneurs can pitch their business ideas to a wider audience for funding. Instead of seeking one or two big investors, you’re appealing to a crowd of potential backers, each contributing a smaller sum but, in the aggregate, meaningful.

      And crowdfunding is not just about the money. Granted, funds are your primary concern, but it is an effective way to test ideas in a highly public platform where entrepreneurs can gauge users’ interest in their innovation.

      Crowdfunding is challenging; it requires an excellent strategy, a convincing pitch, and massive marketing efforts to generate campaign interest. Additionally, some platforms follow the “all-or-nothing” policy that mandates a startup to reach its funding goals; otherwise, the funds aren’t released.

      Seeking Investors

      This route isn’t just about securing funds; it’s about forming strategic partnerships that can propel your business forward. Investors, particularly angel investors, can provide more than just financial backing. They won’t just write you a check but can bring a wealth of industry knowledge, experience, and a network of connections invaluable for a growing startup.

      Angel investors are typically individuals who provide capital for startups in exchange for ownership equity. They’re known for their willingness to support new ideas and entrepreneurs at the early stages of business development. But while the financial boost and mentorship can be incredibly beneficial, it does mean sharing a piece of your business. So, the question is, are you OK with sharing the reins?

      Family and Friends

      Sometimes, the support you need is closer to hand. Family and friends can be a valuable source of funding for your startup.

      However, mixing business with personal relationships needs careful thought. The pros are clear: potential for flexible repayment terms, lower (or no) interest rates, and a more straightforward process. But the cons are equally important to consider. If your business struggles or fails, it could strain or even damage your personal relationships. Treat any loans from family and friends as professionally as you would with a bank or other lender, including having a written agreement and a clear repayment plan.

      Final Thoughts

      Securing a startup business loan with no revenue may not be a walk in the park, but it’s definitely possible. Harness that never-say-die attitude and further explore some of the funding options we’ve discussed in this article.

      Once funding is secured, the real fun begins. You can start turning those dreams into reality, building your business, and making your mark.

      As you do, considering effective payment solutions becomes a key part of your strategy. That’s where we at My Payment Savvy come in. We offer a range of services tailored to startups, from seamless payment processing to comprehensive billing solutions.

      We offer flexible payment solutions for all sorts of startups, whether it’s credit card acceptance, debit card processing, an online payment gateway, or ACH payments.

      We also understand the value of convenience. That’s why we offer an all-in-one business solution that simplifies managing your payment processing.

      With the right funding and the right financial tools from My Payment Savvy, you’re well on your way to making your business dreams a reality.

      Chad Deatherage

      Chad Deatherage

      Chad is a serial entrepreneur and founded Payment Savvy in 2011 armed with the goal of providing high-risk establishments with a pioneering and tailored payment processing solution that allows them to flourish. Having decades of knowledge in the financial services and debt recovery industries, he ensures every client receives the same level of expertise, resourcefulness, and strategic vision no matter the size of the organization. Always willing to push the envelope, Chad’s forward-thinking and leadership skills are responsible for Payment Savvy being on the map as an industry-leading payment processor.