How to Get a Startup Business Loan with No Money: Tips and Resources

By Victor Macias,

Published on Feb 23, 2023   —   6 min read

Photo by Álvaro Serrano / Unsplash

Do you have a startup business idea, but don’t have the money to get started? Do you find yourself thinking, “If I only had the money, I’d be able to start my business?” I’ve been there. Over the past few years, I’ve run a few startups using a variety of funding strategies including bootstrapping, crowdfunding, and raising investment capital.

I’ve experienced the joys and the bumps along the way. My goal is to share a perspective from the inside and show you what I would have done differently to help you.

What to know before you get a startup business loan

You don't actually need money for most ideas.

I launched a fashion apparel brand using pre-selling to purchase my initial inventory. I launched my Men’s Lifestyle Platform in a similar way. Pre-selling allows you to generate cash before you make the actual product. This allows you to build a customer base and test the demand for your offer with very little risk on your end.

Money is an amplifier.

Money alone will not make your business successful. Money is an amplifier. Putting money into an unproven business concept is a fast way to burn through a lot of cash. If your business is growing, adding money to the right advertising channels can help you grow faster. Make sure your business model works before adding money to the equation.

Prove your concept first.

Have you created a minimum viable product (MVP) that your target market has proven they’ll buy? Are you solving a real problem or are you creating a solution in search of a problem to solve? A big mistake I see founders make is wasting a lot of time and money developing the “perfect” product only to find out that nobody wants it. I prefer the Lean Startup Method where you bring the customer to the front of the business development  process. You test, tweak and align with your customer's needs before investing a lot of money in product development or getting the business started.

Assuming you’re past this phase and are still looking for some funding, Here is how to get a startup business loan with no money.

Money You Don’t Have to Pay Back

Most loans require collateral and come with interest rates and repayment terms that can be difficult to meet. Fortunately, there are funding sources available that do not require repayment.


Grants are a type of funding that doesn’t require repayment. It’s money offered, by the government or agencies, designed to impact certain economic initiatives. Grants for small businesses can be appealing, but they require a lot of up-front time investment with a low probability of qualification. Some popular websites for getting grants include the Small Business Development Center (SBDC), and


With crowdfunding, supporters contribute cash to your campaign in exchange for a perk or product. Some popular platforms include Kickstarter and Indiegogo. We raised over $100K using crowdfunding for our cookie company. In order to succeed, it’s important to have a community built before you launch. You need a compelling story and incentives that encourage supporters to contribute. While crowdfunding is an attractive source of funding for some, it’s not a guaranteed way to raise funds. You need to set and meet a funding goal for your campaign to succeed. You also need to pay a percentage of the funds raised to the hosting platform.

Money You Have to Pay Back

Business Credit Cards

Unsecured credit cards can be a useful source of cash for startups, especially in the early stages. They are relatively easy to obtain, and you can find 0% interest credit cards if you keep track of interest rates and payment due dates. A business credit card can help increase your credit score and make it easier for you to qualify for additional business loans in the future if you use it responsibly, meaning you should pay your credit card bills in full and on time each month. While cash flow is important to credit card issuers, they tend to care more about your personal creditworthiness, so having good personal credit (a FICO score of 690 or higher) is usually necessary to qualify for most cards. Business credit cards are especially helpful for startups without revenue.

Unsecured Line of Credit

An unsecured business line of credit is a renewable funding source that doesn't require you to designate a specific loan amount or put up any collateral. You can borrow up to the ceiling on your line of credit limit, or only use a percentage of the line of credit as needed. As you pay off the amount you owe, it's freed up for you to use again when you need it. Assuming you qualify, a revolving line of unsecured credit can be a great fit for newer startups and companies with lower or limited credit history who need flexibility for various expenses. Just be sure you fully understand all of the rates and fees involved each time you utilize your line of credit since the convenience comes at a cost.

Personal Term Loan

A lot of the funding you'll get will probably be a personal loan based on personal collateral. If you're looking to start, you may need to qualify for a term loan from a traditional bank based on your individual creditworthiness.

SBA Microloans

The SBA microloan program offers eligible recipients up to $50,000 toward paying for expenses related to starting or expanding a new business. These funds are disbursed through intermediary lenders in your area, who administer the loans and provide management and technical guidance as needed. SBA microloans must be repaid within a maximum of six years and most will require some form of collateral as well as a personal guarantee. Interest rates will vary based on the lender but typically range between 8% to 13%.

Other Sources

Merchant Cash Advances

With a merchant cash advance, you receive a lump sum of money in exchange for a portion of your future revenue. Instead of paying monthly interest as you would with a standard loan, merchant cash advances are repaid in factor rates — a daily or weekly percentage of your sales. Merchant cash advances can be an easy source of funding for new startups with limited time in business or for companies with poor credit. MCA loans require less documentation compared to other types of funding, as creditors can rely on cash flow almost immediately in daily or weekly remittances. MCA loans also benefit seasonal businesses and companies with low or fluctuating annual revenue.

Equipment Financing

The underwriting process for an equipment loan is a little different than that of a traditional term loan. The lender fronts you with the cash to fund up to 100% of the purchase of a piece of equipment, and the equipment itself is collateral. For that reason, lenders are just as concerned with the value of the equipment as they are with the business's financial performance. The terms of an equipment loan are based on credit (both business and personal), time in business, and how well the equipment fits into your business plan. Cash flow isn’t a major factor.

Invoice Financing

Invoice financing uses a business’s unpaid invoices as collateral. In exchange, invoice financing companies will front you a percentage of your unpaid invoices. Invoice financing companies are just as concerned with the value of the invoices as they are with the business’s finances. So businesses with limited cash flow might have an easier time qualifying for this type of loan.

Equity Investment

Friends and Family

Raising funds from friends and family can be a good option, but it's essential to establish clear expectations and not make any promises that you can't keep. Also, it's important to demonstrate traction and give them some type of equity play.

Angel Investors

Angel investors are groups of investors that invest in early-stage ventures, usually in the range of $25K. They are there to help prepare you for a later Series A round with venture capitalists. However, they take on a higher level of risk and will want a decent amount of equity in exchange for their investment.

Venture Capital

Venture capitalists can provide funding to start your business in exchange for an ownership share and active role in the company. Unlike traditional financing, venture capital invests capital in return for equity, not debt.

Venture capital focuses on high-growth companies and takes higher risks in exchange for potentially higher returns. It also has a longer investment horizon than traditional financing. Keep in mind that almost all venture capitalists will want a seat on the board of directors and will require you to give up some portion of both control and ownership of your company in exchange for funding.

In conclusion, getting a startup business loan without any money may seem daunting, but it's not impossible. Remember to focus on creating a viable business with a proven MVP before seeking funding. Then explore options like crowdfunding, grants, and personal loans. If you're willing to give up equity instead of paying back the money, consider seeking out investors. As always, weigh your options carefully and choose the path that best aligns with your goals and values. Good luck with your entrepreneurial journey!

All Content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. This information does not constitute professional and/or financial advice, nor does any information on the Site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto.

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