Starting a business is an exciting endeavor, but for many entrepreneurs, the biggest hurdle is securing financing—especially when the startup has no revenue. Traditional lenders often shy away from funding businesses without a proven track record or consistent income. However, several loan options and financial products are tailored specifically for early-stage businesses, even those without revenue.
In this comprehensive guide, we’ll explore the best business loans for startups with no revenue, how to qualify for them, what to expect in terms of rates and terms, and how to increase your chances of getting approved. Whether you’re in the idea stage or just launched, this guide will help you understand your options and make informed financial decisions.
Why Traditional Business Loans May Not Work for Startups with No Revenue
Traditional business loans from banks or credit unions usually require:
- A minimum number of years in business
- Positive cash flow and revenue history
- Collateral
- Strong personal and business credit scores
For startups with no income or financial history, these criteria can be difficult to meet. That’s why alternative lenders and innovative funding options are increasingly popular among entrepreneurs.
What Lenders Look for in Startups with No Revenue
Even if your startup hasn’t generated income yet, lenders may still approve funding based on the following factors:
- Personal credit score: A strong credit history shows lenders you’re financially responsible.
- Business plan: A well-thought-out plan that outlines your goals, market research, and revenue model can increase lender confidence.
- Industry experience: Demonstrated experience in your industry can help offset lack of revenue.
- Collateral or personal guarantee: Assets that can back the loan lower the lender’s risk.
- Alternative income sources: If you have another job or side income, lenders may consider it in their evaluation.
Top Business Loan Options for Startups with No Revenue
1. Business Credit Cards
Best for: Covering small expenses, building business credit.
Business credit cards are one of the most accessible forms of financing for new businesses. Many issuers do not require revenue for approval, and some even offer 0% interest promotional periods.
Pros:
- Fast approval
- No revenue requirement
- Build credit history
Cons:
- Lower limits compared to loans
- High interest rates if balance isn’t paid in full
Top Providers:
- Chase Ink Business Preferred
- Capital One Spark Classic for Business
- American Express Blue Business Cash Card
2. Personal Loans for Business Use
Best for: Founders with strong personal credit and no business history.
While not technically a business loan, a personal loan can be used to fund your startup. Approval is based entirely on your personal creditworthiness and income.
Pros:
- Quick funding
- No business revenue required
- Flexible use of funds
Cons:
- Personal liability
- Can impact your personal credit score
Top Lenders:
- SoFi
- Marcus by Goldman Sachs
- LightStream
3. Equipment Financing
Best for: Startups needing vehicles, machinery, or computers.
Equipment financing allows you to purchase or lease equipment by using it as collateral for the loan. Because the equipment secures the loan, lenders are often more willing to work with startups.
Pros:
- Equipment acts as collateral
- Fixed monthly payments
- Improves productivity early on
Cons:
- Only for equipment-related needs
- May require down payment
Top Providers:
- National Funding
- Crest Capital
- Balboa Capital
4. Microloans
Best for: Small startups with minimal funding needs.
Microloans are small, short-term loans typically offered by nonprofit lenders and community organizations. These loans often focus on underserved entrepreneurs including minorities, women, and veterans.
Pros:
- Lenient requirements
- Focus on new businesses
- Low interest rates
Cons:
- Smaller loan amounts (usually under $50,000)
- Slower approval process
Top Providers:
- Accion Opportunity Fund
- Kiva
- LiftFund
5. SBA Microloans
Best for: Entrepreneurs who need low-interest loans with support services.
The Small Business Administration (SBA) offers microloans up to $50,000 to help startups. These are administered through nonprofit intermediaries who also provide mentorship and training.
Pros:
- Competitive interest rates
- Business coaching available
- Designed for startups
Cons:
- Detailed application process
- Requires a business plan
Average Loan Amount: $13,000
Interest Rates: 8% to 13%
6. Crowdfunding
Best for: Product-based startups and consumer-facing businesses.
Crowdfunding platforms like Kickstarter or Indiegogo allow you to raise funds from the public. You create a campaign and offer perks or rewards for contributions.
Pros:
- No repayment required
- Validates your product idea
- Builds brand awareness
Cons:
- Not guaranteed to raise enough
- Requires significant marketing effort
Popular Platforms:
- Kickstarter
- Indiegogo
- GoFundMe
7. Business Grants
Best for: Nonprofits, tech innovators, minority-owned startups.
Grants provide free money that does not need to be repaid. While competitive, they can be a valuable funding source for businesses with a strong mission or innovation.
Pros:
- No repayment
- Encourages innovation
- Helps underserved communities
Cons:
- Competitive and time-consuming
- Often industry-specific
Grant Sources:
- Small Business Innovation Research (SBIR)
- U.S. Economic Development Administration
- Minority Business Development Agency
8. Friends and Family Loans
Best for: Founders with supportive networks.
Getting funding from friends or family is common in the early stages. Structure these arrangements with formal agreements to avoid misunderstandings.
Pros:
- Flexible terms
- Easier access to funds
- Builds early momentum
Cons:
- Risk of damaging personal relationships
- May not be a significant amount
9. Venture Capital and Angel Investors
Best for: Startups with high growth potential.
While technically not loans, venture capital and angel investments provide funding in exchange for equity. Investors are more likely to fund startups based on the idea, team, and potential rather than revenue.
Pros:
- Large capital infusion
- Access to mentorship and connections
- No repayment (equity-based)
Cons:
- Loss of ownership
- Intense scrutiny and due diligence
Top Platforms to Connect with Investors:
- AngelList
- Gust
- Crunchbase
10. Revenue-Based Financing (Pre-Revenue Alternative Options)
Best for: Subscription-based or ecommerce startups with traction but no steady revenue.
Some lenders are willing to fund startups based on expected future revenues using metrics like email lists, preorders, or engagement levels.
Pros:
- Flexible repayments
- No equity dilution
- Quick funding
Cons:
- Requires some customer or market validation
- Not ideal for pre-launch companies
Top Providers:
- Clearco
- Pipe
- Capchase
How to Qualify for a Business Loan Without Revenue
- Check Your Personal Credit Score
Most lenders will use your personal score as a stand-in for business credit. Aim for at least 650, although some microlenders accept lower scores. - Write a Strong Business Plan
Include market research, revenue projections, cost estimates, and your strategy for growth. - Prepare Financial Documents
These may include bank statements, tax returns, and documentation of personal income or assets. - Offer Collateral or Personal Guarantee
Offering something of value can increase your approval chances and secure better rates. - Apply to Multiple Lenders
Each lender has different criteria. Applying to several can improve your odds of approval.
Tips for Managing Loans as a Startup
- Avoid over-borrowing: Only take what you need and can reasonably repay.
- Create a repayment plan: Ensure your budget includes monthly loan payments.
- Keep personal and business finances separate: Use a dedicated business bank account.
- Build your business credit: Pay on time and keep your credit utilization low.
Final Thoughts
Getting a business loan with no revenue is challenging, but not impossible. With the right approach, tools, and financial discipline, startups can access the capital they need to launch and grow. From business credit cards to SBA microloans and crowdfunding, the options are diverse and expanding.
Before choosing a loan product, assess your current situation, your long-term goals, and your ability to repay. Focus on building your credit, writing a compelling business plan, and demonstrating your potential to lenders or investors.