How to Get a Startup Business Loan With No Money: 3 Things You Need When Qualifying for a Credit

Starting a business, especially as a first-time entrepreneur, often requires financing. Whether you’re needing to cover start-up costs or want to rapidly expand, you’ll likely need some type of loan to get the job done.

However, many entrepreneurs can find themselves struggling to get the financing they need – particularly those with little collateral who are just starting up or want to grow quickly. It may seem impossible but there are ways for these entrepreneurs to get the funds needed for their business without traditional forms of debt financing.

While a startup business loan with no money is not easy to come by and may require significant planning and effort from your side, there are credits available if you know how and where to look.

Benefits of Obtaining a Startup Business Loan


For entrepreneurs looking to finance their new business, knowing how to get a startup business loan with no money can be incredibly advantageous. While there are a number of challenges and risks associated with taking on a loan, there are also numerous potential benefits.

  • One advantage of taking out a loan is that it allows you to free up more money and capital for your startup. This money can then be used to purchase more inventory, hire more employees, and invest in marketing efforts. A loan can also give your business more flexibility in terms of expenses, allowing you to focus on the areas that need development and investment most.
  • Many lenders offer loans specifically designed for startups. This means they often come with lower interest rates or longer repayment terms than traditional loans as well as other perks like working capital advances, lines of credit, and access to debt consolidation services.
  • Having access to a loan comes with the benefit of credibility; having lenders willing to support you gives you greater legitimacy as an entrepreneur, which can open doors when seeking out angel investors or venture capitalists down the line.

Qualifying for a Loan

Securing a loan can be very difficult for startups due to their lack of history—but it’s not impossible. Before taking the plunge, consider these qualifications and requirements when applying:

  • Credit: The surest way to qualify for a business loan is through well-established credit scores with various financial institutions like banks and credit unions. Having good personal credit is important as well because lenders will likely review both your personal and business financial statements as part of the application process.
  • Business Plan: A complete and organized business plan shows potential lenders your understanding of the customer base, competition, market size, product or service lifecycle, production costs, projected expenses, and profit forecasts. Lenders will also value cash flow projections over academic achievement or past experience when deciding on loans for startup companies.
  • Collateral: Business owners without enough veteran customers may need additional collateral—such as equipment or accounts receivable—to secure the loan against potential losses incurred by lending to untested companies without solidified cash flow patterns or revenue streams. Collaterals can include stocks, bonds, or intangible property such as your home; if you default on the loan payments, these items may be seized by the lender in order to satisfy the debt obligation.

Understanding Different Types of Startup Business Loans


The two most common types of no-money-down startup business loans are non-collateralized business lines of credit and small business grants. Non-collateralized business lines of credit are unsecured loan options issued by banks and other lenders that generally include smaller limits with higher interest rates than traditional bank term loans. Small business grants are a type of funding option provided by the government or other third parties to entrepreneurs who meet certain criteria; these grants do not need to be repaid but often include strict reporting requirements on the part of recipients.

Other financing options for startups without money upfront may include:

  • Crowdfunding
  • Equipment leasing/financing
  • Invoice factoring/purchasing
  • Microloans

What are the alternatives?

If you’re ready to take the plunge into small business ownership, there’s often one major hurdle you need to overcome – how can you launch and grow a business when you don’t have any capital to work with? There are, however, both conventional and unconventional funding options available for those without the money needed to start up.

Conventional Options

For those who lack the funds necessary to get their business off the ground, one of their best bets for acquiring cash is a startup loan from a bank. Small Business Administration loans are very attractive in this respect as they offer heavily discounted loan requirements than traditional banks. Additionally, angel investors and venture capitalists may also be inclined to consider your idea as an opportunity worth investing in. If feasible and secure, other financing options include but are not limited to market equity crowdfunding campaigns, peer-to-peer lending platforms like Prosper or Lending Club, or asking friends and family members for investment in the form of an unsecured loan.

Unconventional Options

For entrepreneurs who have little-to-no startup capital at their disposal, there are other unconventional methods that could be devised if often riskier than conventional methods:

  • Small credit lines with vendors who accept payments over time such as PayPal Credit
  • Small local grant programs provided by communities
  • Bartering with suppliers and vendors by providing services or products instead of cash payments
  • Performing customer service-oriented tasks earlier on in order to save on overhead costs such as marketing
  • Seeking out free resources within your network like mentorships for guidance during the development process

Ultimately finding a suitable method for funding a business requires entrepreneurs to carefully consider all their financing options before jumping on board!



Getting a startup business loan with no money is easier than you think. You just need to demonstrate that you have the ability to repay the loan, even if you can’t provide any assets or collateral. Create a sound business plan and find lenders who are willing to work with you on your situation. With some research and creativity, it is possible to get the funding that you need to start your business without having any cash on hand.