Startup Business Loans with No Revenue:
Your Options
Starting a business can be a challenging endeavor, especially if you have no revenue to show for it. Despite this, there are still options available for obtaining startup business loans with no revenue.
People often seek startup business loans with no revenue to get access to cash to build their businesses. If you’re low on money, it indicates that you’d need to apply for financing. In this way, you’re presumably thinking about how to get a business loan with no revenue—if that is even a chance.
One option is personal term loans, which do not take into account your time in business, but rather focus on your credit score and conformable personal income. In order to qualify for a personal term loan, it is advisable to have at least $50k in valid personal income, a personal credit score of 700 or higher, and either own or rent real estate. Personal term loans typically have an interest rate of 8-15%, terms of 5–7 years, and are unsecured, meaning no collateral is required, but there is a personally guaranteed.
700 FICO Score or Higher Required For Startup Funding
Obtaining Startup Business Loans with No Revenue
As you can envision, getting a small business loan with no revenue is challenging. And keeping in mind that it’s far-fetched that you’ll have the option to get a traditional or SBA loan with assets restriction. You have other financing arrangements accessible to you.
In case you’re considering getting a business loan with no revenue. You may fit the bill for the following financing arrangements. Furthermore, on the off chance that you do, these elective loans can help support your business’s cash flow. So you can be in a situation to qualify for a small business loan that yields a more significant measure of cash.
Personal Term Loans for Business Purposes
You deserve the funds to grow your business if you’re a startup or small business owner with a good track record and credit history. Personal term loans can fund your business, including purchasing equipment/inventory, kick-starting a campaign, hiring new employees, or even scaling up.
Unlike standard business loans, these personal loans don’t consider your time in business, just your credit score and verifiable personal income. This distinction makes personal term loans an excellent option for startups or small business owners to get a head start on their runway.
However, because these loans pose a significant risk to lenders, ensure that you have at least $50k in verifiable personal income, a 700+ credit score, and currently renting or owning real estate. Further, personal term loans usually have an 8-15% APR. Terms of 5 to 7 years and most personal term loans are unsecured, requiring no collateral.
This is the way to go if you want $300K in long-term debt, low monthly payments, and enough runway to start your business.
0% Business Credit Cards
Your business’s most significant costs, similar to finance and lease, will require loan-sized assets to fulfill. However, you can meet the ongoing expenses you face daily with a 0% business credit card. Also, mindfully utilizing a credit card will support your credit score and assist you with qualifying for business loans later.
Cash flow is significant, yet credit card issuers worry more about your creditworthiness as an essential factor in the business loan application. Endless business credit cards are available today, all with advantages and rewards. And highlights that match the explanation you’re searching for financing in any case.
As we said previously, it takes cash to bring in cash. Utilizing a cash-back business credit card is a valid example. Spending on specific revenue-generating activities brings in growth revenue, which you can reinvest into your business.
Equipment Financing
Equipment financing is a type of loan that allows businesses to purchase equipment by borrowing funds from a lender and using the equipment as collateral. This can be a good option for startups or small business owners who need to purchase equipment but do not have the upfront funds to do so.
The guaranteeing interaction for an equipment loan is somewhat not quite the same as that of a traditional loan. The lender fronts you with the cash to finance up to 100% of the equipment. And they utilize the actual equipment as collateral.
Thus, lenders worry about the value of the actual equipment, as they are with your business’s financial record. The details of an equipment loan are dependent on credit. Both business and individual, time in business, and how well the equipment finds its way into your business plan.
Cash flow is not the primary consideration around there. It bodes well to go for an equipment loan if you’re searching for the latest machinery, PC, or vehicle to increase revenue.
Invoice Financing
Invoice financing ties in when you’re holding on to get paid for finished work, and costs keep adding up. Luckily, some lenders can dissect those unpaid invoices and provide you with finances early. So you don’t have to stand inactively until you get paid.
Like equipment loans, invoice financing is a sort of collateralized loan. For this situation, invoice finance companies utilize your business’s unpaid invoices as collateral. In return, they’ll front you 80% to 90% of the lost revenue. You’ll get the rest, excluding the invoice financing organization’s fee, when your client pays the invoice.
Similarly, as with an equipment loan, invoice financing companies worry about the value of your invoices as they are with your business’ finances. Along these lines, businesses with restricted cash flow may meet all requirements for this kind of loan more than others.
SBA 7a Loan
SBA 7(a) loans are another option for startups and small business owners. These loans are provided by the Small Business Administration and are designed to help businesses access working capital. Loan amounts can range from $50,000 to $5 million, depending on the needs of the business.
In addition to traditional loan options, small business owners may also consider business lines of credit or SBA microloans. Business credit cards can also be a useful tool for managing cash flow and meeting ongoing expenses.
Securing startup business loans with no revenue can be a daunting task. However, with the right options and knowledge, you can get the financing you need to start your business. Here are some options to consider:
Pros and cons of each option:
Personal loans:
- Pros: Quick access to funds, no collateral required.
- Cons: High-interest rates, short repayment terms.
Business credit cards:
- Pros: Easier to obtain than traditional loans, and rewards programs.
- Cons: High-interest rates, potential for overspending.
Microloans:
- Pros: Easier to obtain than traditional loans, can build credit.
- Cons: High-interest rates, low borrowing limits.
Crowdfunding:
- Pros: No repayment required, a marketing opportunity.
- Cons: Not guaranteed funding, time-consuming.
Grants:
- Pros: Free money, no repayment required.
- Cons: Highly competitive, specific criteria to qualify.
Understanding Your Options
Before diving into the lending process, it’s important to understand your options. The most common types of startup business loans include:
- SBA loans
- Business lines of credit
- Equipment Financing
- Invoice financing
- Personal loans
Each type of loan has its own unique benefits and requirements. By understanding your options, you can choose the loan that’s right for your business.
Preparing Your Application
Once you’ve found the loan that’s right for your business, it’s time to prepare your application. Here are some tips to help you increase your chances of approval:
- Gather all necessary documentation, including your business plan, financial statements, and tax returns.
- Polish your credit score. Most lenders require a minimum credit score of 680.
- Have a solid plan for repaying the loan. Lenders want to see that you have a clear plan for paying back the loan on time.
Tips for Securing a Loan with No Revenue
Securing a startup business loan without revenue can be challenging, but it’s not impossible. Here are some tips to help you increase your chances of approval:
- Build a strong personal credit score. Lenders often consider personal credit scores when evaluating loan applications for businesses with no revenue.
- Supply a detailed business plan. A well-crafted business plan can help convince lenders that your business is practical and has the potential for success.
- Offer collateral. If you have assets that you can offer as collateral, such as real estate or equipment, lenders may be more willing to approve your loan.
Choosing the Right Lender
Choosing the right lender is critical to securing a startup business loan. Here are some factors to consider when evaluating potential lenders:
- Interest rates and fees
- Loan terms and repayment options
- Reputation and customer service
BitX Funding: The Best Solution to Get A Business Loan with No Money
Regardless of the type of financing you decide, it is important to have a solid business plan in place and to carefully consider the terms and repayment schedule. Proper planning and management of cash flow can help ensure the success of your startup business.
If you are seeking financing for your startup business with no revenue, BitX Funding online lender may be able to help. Our team of loan experts can assist you in deciding the best type of startup business loan for your needs and goals.
Whether you are just starting out and want to avoid long-term repayment terms or have other specific financing requirements, we can help you find a solution. Contact us at 800-824-2407 to speak with a loan expert, email [email protected], or the application process is to apply online.
