Have you ever dreamed of owning your own business? While people dream of starting a business, many people are unable to go through with it due to lack of funding and most people cite that lack of initial startup money is the reason they can’t get approved for a loan. It helps to have startup money, but you don’t always need it to get approved for a startup business loan. Ultimately, a good credit score and business plan can go along with banks and investors.
Read on to learn about how to get a startup business loan with no money.
Can You Get a Startup Business Loan with No Money?
Yes, you can get a startup business loan with no money. While it helps to have some money as collateral and it looks good to banks, having money is not a hard requirement. In fact, your credit score and business idea can be even bigger factors that determine the type of business loan you can get. Plus, you can even get approved for this type of loan if you have a bad credit score. Ultimately, it comes down to how you go about the process.
How to Get a Startup Business Loan with No Money
There are a handful of ways you can apply for a business loan without money. Plus, you can also look for funding from other sources to ensure that you have enough capital to start your business. Learn about all of your options below to get started.
Improve Your Credit Score
The best way to get a startup loan with no money is to improve your credit score. You can check your credit report with apps like Experian or Credit Karma but they don’t always tell you the full story. Plus, banks will do a deeper credit background check than what some of these credit report options offer.
Fortunately, you can run a public records search with Information.com to view all of your credit information. This can help you find discrepancies and avoid getting into situations where they run your credit for a loan only for the bank to decline you, which can further ruin your credit.
Work with Investors
Angel investors or venture capitalist firms may provide you with money, even if you don’t have any to start with.
That said, you’ll need a good business and marketing plan to draw attention to your company. Investors will also want stock in the company to ensure that they get a return on their investment. For people who don’t have the best credit, angel investors or venture capitalists are a great way to secure funding.
Apply for a Grant
A grant isn’t the same thing as a loan but there are grants available for most industries. Not everyone can get one, and you might have to jump through some hoops to qualify. That said, businesses are awarded billions of dollars each year to help them get off the ground. There are grants for minority businesses, students, and businesses in under-served niches. Take some time to see if grants are available for you before you start applying for loans.
Apply for a Microloan
A microloan is another popular option for startup companies. These are loans that are less than $50,000, so they won’t work for everyone. However, if you just need to cover a few expenses it’s worth it to apply for a microloan. What’s more, the small size of these loans makes it easy to get approved, even if your company doesn’t have any cash flow.
Use Business Credit Lines
A small business line of credit can help you secure the funds you need. The better your credit score and revenue the more credit you’ll be awarded.
We don’t recommend using all of your credit to open credit cards and run them up, but it can be a useful tool to get some equipment for your new startup.
Get a Startup Business Loan with No Money Today!
Startup business loans aren’t hard to obtain when you know how to prepare. Make sure you check your credit score before applying to prevent a hard inquiry that leads to no funding. Once you know what your credit situation looks like you can create a business plan and start reaching out to banks and investors. While some lenders will give you a hard time, don’t let that discourage you, and make sure you keep trying.
