Getting funding for a new startup business can be a challenge. Most small business loans have some minimum revenue requirements. Lenders use your company’s revenue to gauge the risk of approving a loan, and most startups do not have years of financial history that they may provide to a bank or private lender. This raises the question: are there startup business loans with no revenue requirements? The answer is YES! Read along to learn about startup loans that requireno revenue requirement.
Top 5 startup business loans with no revenue requirement
1. SBA 7
Small Business Administration (SBA) 7(a) loan is well-known for new businesses that don’t require revenue. This loan is backed by the U.S. government and comes with enticing features such as low-interest rates and longer repayment terms.
2. Online business term loan
This loan is outstanding for business owners who lack the funds or revenue necessary to get approved for a traditional loan. These loans offer easy access to money and are unsecured. However, these loans will be authorized only if you have good personal or business credit.
3. Merchant cash advances
A merchant cash advance is a loan based on a portion of a company’s potential future sales. Small enterprises and startups with little resources benefit from these loans. Applying for merchant cash advances is easy, and the money is usually readily available.
4. Business lines of credit
Business lines of credit offer a consistent flow of funds that can be used as needed without any collateral. Thes credit lines can be utilised for different purposes, including paying overhead expenses and stock purchases. They function similarly to credit cards. Your credit line will be available once you pay your balance.
Microloans are short-term company loans. They are great alternatives for start-ups with no revenue because they have minimum requirements for acceptance. Non-profit groups frequently provide microloans, which can assist startups in filling funding shortfalls.
6. ACH loans
Microloans and ACH loans are similar. However, ACH loans are provided by banks and other financial organisations. Since ACH loans are often for higher sums, they have stricter approval requirements. However, they can provide much-needed capital for new businesses with no revenue.
There are a few other ways you might be able to get the money you need to grow your business if you don’t like the options for business loans with no revenue requirements.
Alternative Ways to Raise Startup business loans with no revenue requirements cost
Crowdfunding is a way to raise money online for your startup business without requiring revenue. You can do this by soliciting loans from several investors (debt crowdfunding) and requesting donations (donor crowdfunding). You can even sell off small portions of your business (equity crowdfunding) or offer incentives for contributions (reward-based crowdfunding).
2. Business credit cards
A business credit card is a good financing option for startups with no revenue and no required business credit score. Depending on the type of business credit card you apply for, you need to have excellent personal credit to qualify. Also, there are options such as secured business credit cards for startups with no credit or bad credit.
3. Friends and Family
As a small business startup, you can source money from relatives and friends or raise investment capital from them. If you’re fortunate to have this choice, weigh the risk beforehand. If your business fails or you can’t repay a loan from a close friend, these complications can damage meaningful relationships.
Startups can quickly get financing without any fees, thanks to small company grants. Nonprofits, government agencies, and other groups provide these grants. They can be an excellent method to get the money you need to run your firm.
Before applying, it’s crucial to understand the prerequisites for obtaining a grant because many of them demand a specific amount of need or evidence of a viable business strategy.
Others forms include:
1. Personal loans
Personal loans often have lower interest rates than company loans and allow you to borrow a specified amount of money for any reason. However, it’s crucial to remember that personal loans may require a high credit score to qualify. It is vital to verify your score before applying. Please read the fine print before taking out a loan because it could have stricter payback terms than other forms of borrowing.
2. Equipment financing lenders
Though not all, some equipment finance lenders are open to working with start-ups. Some lenders might not require you to meet minimum monthly income or tenure in business standards. The loan is secured by the collateral your company is buying, which lowers the lender’s risk. Depending on the lender, you could, however, require good personal credit to be eligible for this financing option.
There are also business monitoring organizations that help secure business loans with no revenue requirements. It is beneficial to seek advice from business monitoring companies when requesting business loans without a revenue requirement. These groups provide information and assistance to help business owners understand the loan application process and their options. Some of these groups include:
1. Small Business Administration (SBA)
SBA is a well-known business monitoring organisation that offers a wide range of business loan products. They also provide guidance on which option is best for a particular business. Additionally, the SBA helps entrepreneurs understand the eligibility requirements and other details of the loan process.
2. National Association of Small Business Owners (NASBO)
NASBO provides guidance and resources on loan products, eligibility requirements, and the loan process in general. Additionally, NASBO provides assistance with finding a lender who is willing to offer a loan with no revenue requirements.
3. The International Business Innovation Association
InBIA gives additional support for entrepreneurs seeking loans without revenue requirements. InBIA helps entrepreneurs to identify potential lenders willing to work with startups and provide resources on loan products and the loan process.
Startup business loans with no revenue requirements are an ideal way for entrepreneurs to access funds they need to get their businesses up and running. Although getting these loans might be challenging, they give business owners the freedom to follow their ideas without worrying about having to satisfy tight revenue requirements.