If you’re a small business owner, or start-up seeking funds for your business, you may wonder how to get a loan with no revenue. The truth is that even if you still need to get sales, there are still options available to help you get funding for your company. Some lenders will consider the business owner’s personal assets when reviewing applications. If your credit history is clean and you have other sources of income (like rental properties or investments), you may be able to secure financing even without any revenue coming in right now.
As long as those other sources can cover operating expenses until sales start rolling in!
Figure out how much money you need.
If this is your first time applying for a business loan, the first step is to figure out how much money you need. This can be calculated in several ways:
- How much do I need to start or grow my business?
- How much do I need to keep my business running?
- How much do I need to expand my business?
- How much do I need to pay off the debt holding me back from further growing my company?
Once you’ve determined how much money is needed, consider what type of loan would be most beneficial for your particular situation.
Research online business lenders.
- Research online business lenders. There are many online business lenders that can help you find the loan you need. You should look for a lender that offers the type of loan you’re seeking and one that has experience with your industry or type of business. For example, suppose you’re starting a restaurant. In that case, it might be best to work with a lender specializing in small business lending rather than one who specializes in loans for equipment or real estate purchases.
- Know what kind of collateral is required by your lender. Most lenders require collateral to secure their loans, for instance, banks often require businesses to use personal property such as household items like jewelry or electronics as collateral for their loans because these items aren’t easily sold on public markets like stocks and bonds are (and thus aren’t as liquid).
Check your credit score.
Credit scores are a three-digit number that’s used to measure your creditworthiness. They’re calculated from the information in your credit report, which includes information about where you live, how much debt you have and whether or not you pay your bills on time.
Your score can be affected by many factors, including the type of account you have (credit card vs. car loan), how much money is owed on each account and whether or not any derogatory information has been reported to the credit bureaus. For example, if there are late payments on an account that was recently opened, it will negatively impact your score because it shows lenders that they might not get their money back if they lend it to you.
Prepare paperwork and supporting documents.
The Small Business Administration (SBA) is a federal agency that provides loans and loan guarantees to small businesses. If you’re thinking of applying for a small business loan through the SBA, here’s what you need to know:
- What is the SBA? The Small Business Administration was founded in 1953 by President Dwight D. Eisenhower as part of his “Atoms for Peace” initiative. Its purpose was to help stimulate economic growth by encouraging entrepreneurship among American citizens. Today, this organization provides financial assistance through loans, guarantees and contracts with more than 120 different lenders throughout the United States.
- What is an SBA loan guarantee? When you apply for an SBA guaranteed loan from one of these lenders (such as Wells Fargo or U.S Bank). Our team of experienced commercial bankers specialize in working with local businesses just like yours! We’ll review all aspects of your business before deciding whether or not we can get you approved based on the criteria outlined below:
Find a lender that matches your needs.
It is important to find a lender that matches your needs. What are the different types of lenders? Where do they get their money? When you’re looking for a business loan, there are three main types of lenders: commercial banks, credit unions and alternative lenders.
- Commercial Banks. These financial institutions take deposits from customers and lend to small businesses (and individuals) who want to borrow money. They also provide mortgages for home purchases, checking accounts for individuals and businesses that need an easy way to receive payments electronically from clients or customers, as well as other products such as credit cards or debit cards used at ATMs worldwide.*
- Credit Unions – nonprofit organizations, owned by members who pool their resources to obtain lower interest rates on loans than what’s available through a traditional bank.*
- Alternative Lenders include peer-to-peer lending platforms like Prosper Marketplace, where individuals can invest directly into personal loans made by other individual investors through an online platform.
Consider microlenders and nonprofit lenders.
There are a number of other options for identifying lenders for no revenue businesses, including:
- Microlenders. Microlenders are smaller banks or similar institutions that make small loans to businesses with lower credit scores and / or asset bases. They typically have higher interest rates than traditional lenders but can be a good choice for borrowers who don’t qualify for conventional financing.
- Nonprofit lenders. Many community development organizations offer special financing programs designed to help start-ups and small business owners get the funding they need to grow their businesses in underserved areas. These programs may not require proof of income or personal financials upfront, so they can be a great option if you want more flexible qualifications than typical SBA loans (which usually require at least two years of tax returns).
A no-revenue business may still be eligible for some business loans or financing options provided by the Small Business Administration (SBA).
SBA loans are for small businesses that need financing but can’t get it from other sources. They’re also for companies that don’t have enough revenue to secure a traditional business loan but have a strong credit history and good prospects for future growth.
SBA loans are available through local banks, credit unions, and online lenders like Lending Club, Prosper and Upstart.
Conclusion: How To Get A Business Loan With No Revenue
You can get a business loan with little or no revenue, but it takes work to find lenders.
A business loan, small business grant, or non-traditional business financing option may be the answer for your no-revenue business. Research online lenders that offer this type of funding. Then, check your credit score before applying for a loan or financing option with one or more providers. Finally, prepare all supporting documents and find a lender who matches your needs.
