10 Capital Loan Options for Startups with No Revenue Yet

You have a big idea but no revenue yet. You need cash to buy gear, hire a team and cover bills. You may worry about bad credit, steep interest rates, or strict underwriting at banks.

Key Takeaways

• Startups with zero revenue can tap ten funding routes. These include business credit cards (Shopify 3% rebate with FICO 670+; Wells Fargo $500 deposit; PNC 1 point per $1; BofA 0% APR for 9 months, 2% office spend; TD Bank 1.75% after $3,000 spend), SBA loans (up to $5 million–$5.5 million, rates 10.5%–15.5%), microloans (up to $50,000), equipment financing (100% of gear costs at 4%–45% APR), invoice factoring (10%–79% fees), merchant cash advances (40%–350%), peer-to-peer loans (credit ≥630 on Prosper, Upstart), crowdfunding (Kickstarter $26,000 for Dapper Boi; GoFundMe; Fundable; StartEngine; Crowdcube), friends & family, and grants ($110,000 to Sani’s Shamdasani sisters).
• Lenders set rules on credit, collateral, and fees. Microloans lean on a simple plan, not assets. SBA loans need good credit and a personal guarantee. Equipment financing uses gear as collateral. Invoice factoring holds receivables. MCAs take daily sales. P2P loans may block scores under 630. Origination fees run 0.5%–8%.
• Crowdfunding works three ways. Reward sites like Kickstarter offer merch or early access. Donation sites like GoFundMe need no payback. Equity sites (Fundable, StartEngine, Crowdcube) sell shares. Vicky Pasche hit $26,000 on Kickstarter with clear marketing and a solid plan.
• Government grants need no repayment. They run at local, state, federal, and corporate levels. Eligibility varies by industry, demo, or mission. The Shamdasani cofounders won a $110,000 innovation grant. You must meet rules, track deadlines, and present a strong business plan.
• Angel investors and VCs fund startups for equity. AngelList links founders to accredited angels. VCs vet pitch decks, then ask for 20%–40% ownership. Equity deals boost capital for product dev, hiring, or expansion. Investors also bring mentors, board seats, and industry contacts.

What are the best small business credit cards for startups?

Startups can tap charge cards to fund early needs.

How can microloans help startups without revenue?

Microloans let startups with no revenue score business funding. They range from a few hundred dollars to 50,000. Nonprofit lenders target early-stage businesses underrepresented by banks.

Credit score or collateral plays a smaller role than in bank loans. A simple business plan can help you win funds during a loan application.

Money can cover inventory funding, marketing pushes, product development. You may use funds as working capital to boost cash flow. You avoid strict bank loan terms and high interest rates of merchant cash advances.

You get a chance to build credit history with affordable repayment terms. Annual percentage rates vary by lender. A business loan calculator can help you plan repayments.

How do crowdfunding platforms work for startup funding?

Crowdfunding websites let startups tap many backers for small contributions. A pledge portal like Kickstarter hosts reward-based campaigns where creators offer merch, early access, or unique perks in exchange for funds.

Vicky Pasche raised $26,000 for Dapper Boi on one such site, beating an $18,000 goal. GoFundMe, a donation portal, lets people give cash gifts with no loan repayment. Stake-based crowdfunding via Fundable, StartEngine or Crowdcube lets investors buy equity stakes in exchange for working capital.

Each model builds startup funding and boosts cash flow.

Strong marketing and a clear business plan lure a broad audience to any crowdfunding platform. Entrepreneurs often add working capital loans or sba microloans to cover extra costs that public funds may miss.

Anyone can launch a campaign, even a venture with zero revenue, and keep cash flow moving. Creative reward tiers and regular updates help maintain momentum.

What should you know about friends and family financing?

Friends and family financing skips credit checks and paper-heavy hurdles. It also spares your credit score from hard pulls. Startups tap into personal savings or a relative’s personal loan for working capital.

Borrowers often enjoy lower interest rates than typical business loans.

You can shape the deal as a loan or equity financing. A clear set of loan terms and a written personal guarantee protect both sides. Missing a loan repayment can strain bonds with loved ones.

Open talks and a signed promissory note help keep all parties on the same page.

What are Small Business Administration (SBA) loans?

The U.S. Small Business Administration backs a share of each sba loan, so banks take less risk and startups gain working capital. General purpose loans deliver up to $5 million for a business plan or inventory funding.

Asset loans cover as much as $5.5 million for equipment financing or property purchases. Starter loans fill smaller sums with fixed interest schedules.

Interest rates sit between 10.5% and 14% on variable plans, and between 12.5% and 15.5% on fixed plans. Flexible loan terms and long repayment periods ease cash flow strain. Entrepreneurs use a lender matching tool to find approved banks.

Each loan may need a personal guarantee and a solid credit report.

How does equipment financing support startups?

Equipment loans let startups buy machinery with little revenue. Lenders like Taycor Financial or commercial banks pay up to 100% of gear costs. Startups gain vital tools without upfront capital.

They pay interest rates from 4% to 45% APR over set terms.

The financed gear serves as collateral. Lenders can reclaim equipment if startups skip loan repayments. Many require a small down payment or personal guarantee. This financing boosts working capital and builds business credit.

Use a business loan calculator to compare loan terms.

What is invoice factoring and how can it help?

Invoice factoring, also called accounts receivable financing, gives startups a cash advance on unpaid invoices. It taps into your working capital in days as a fast business funding tool.

A lender holds invoices as collateral, so you skip extra personal guarantee. Rates vary from 10% to 79%, says NerdWallet. A business loan calculator helps you compare interest rates and loan terms.

This tool boosts cash flow for startups with gaps in payment cycles. It acts like a bridge over the chasm between services rendered and payday. A lender takes a cut when clients clear their bills, then sends you the rest.

You dodge missed rent or stalled inventory orders while waiting for invoice repayment.

How do merchant cash advances work for startups?

A merchant cash advance gives a startup a lump sum in exchange for a share of daily card sales. You pay a fixed slice of each sale, so repayment follows your cash flow, not a set schedule.

This revenue-based financing costs much more than startup business loans or working capital loans, with rates from 40% to 350% and mimics the flexibility of accounts receivable financing.

Rapid Finance, Shopify Capital, Reliant Funding pull payments via your payment processor or point of sale system. Firms with thin credit scores or zero revenue history find the process simple.

Shopify Capital sends money in days and applies no compounding interest. Startups use this choice to solve working capital needs while drafting a business plan and building a credit line.

What is peer-to-peer lending for new businesses?

Peer-to-peer lending links startups to individual investors. An online portal matches loan seekers with funders. Platforms like Prosper Marketplace and Upstart Network run automated creditworthiness checks.

These checks set rates and loan amounts. Borrowers with good credit snag competitive rates. Startups without revenue face higher fees and lower limits. A personal credit score under 630 may block p2p loans.

Businesses spend funds on working capital, equipment financing, or inventory funding.

Investors on Prosper Marketplace and Upstart Network fund parts of each small business loan. Borrowers get extra capital for a range of needs, from inventory funding to cash flow. Terms often run between one and five years, with rates based on credit history.

Good personal credit and a solid business plan win lower rates. Startups must share a personal guarantee for many offers.

How can a business line of credit benefit your startup?

A business line of credit works like a financial safety net for your startup. It opens a pool of funds you tap when bills pop up or when you need extra working capital. You pay interest only on what you use, and rates can range from 10% to 99%.

Some lenders approve startups after just three months in business. Hillary Markenson, president of Reverie, calls this tool vital for managing expenses. Use it to smooth out cash flow dips or grab a sudden chance to buy equipment or inventory.

Startups often spot deals that vanish fast. You can draw from your credit line to score that discount on raw stock. Business loan calculators help you compare rates and repayment terms.

The credit line also supports your working capital and works alongside sba loans or equipment financing. It acts like a flashlight in the dark when revenue lags. Just set a personal guarantee, keep an eye on your credit score, and cover the principal on time to avoid loan defaults.

What government grants are available for startups?

Government grants run at local, state, federal and corporate levels. They target specific industries or demographics and ask for no repayment. Think of grants as a golden ticket, they carry no payback strings.

Sani cofounders Niki and Ritika Shamdasani grabbed $110,000 in business grants from a regional innovation fund, boosting their working capital. Use an online grant portal, or drop by a local business support center to spot funding chances.

Grant amounts swing widely, and competition stays fierce, so mark your deadlines.

Each funding program brings its own eligibility rules. Some favor minority founders, others back green energy or tech firms. A rock-solid business plan and clear cash flow forecast can tip the scales.

You can apply through a digital grants portal or meet an advisor at a business support office. Awards can fuel equipment financing, inventory funding, or research and development. Competition remains stiff, so refine your pitch, track deadlines, and watch your venture take off.

How do angel investors fund early startups?

Angel investors give cash to startups in return for equity shares. They look at a clear business plan, solid financials, and growth potential. These backers expect a share of ownership and future profits.

Entrepreneurs must cede some decision power in exchange for working capital.

Investment platforms like AngelList connect founders to accredited investors. Strong teams, scalable models, and fresh products attract more capital. Founders share pitch decks on these networks and set clear equity financing terms.

What role does venture capital play in early-stage businesses?

Venture capitalists invest cash into startups in exchange for equity. They look for high-growth, scalable ventures that fit a fund’s focus. Founders craft a pitch presentation and solid business plan, then research each VC firm’s background.

Venture firms vet ideas through a due diligence process and study competitors before they commit.

Equity financing can boost working capital, cover product development, or fund hiring. It can replace or supplement other options like SBA microloan or lines of credit. Startups may give up 20 to 40 percent ownership, yet they gain mentors, a board seat, and industry contacts.

Smart teams use a clear financial forecast to show their edge and growth potential.

How do startup incubators and accelerators help new businesses?

Startup incubators offer shared workspaces. Programs include utilities, high-speed internet, and lab gear. They grant legal and accounting help to cut fees. This boost frees cash in your working capital.

Founders can use saved funds for a product upgrade or ad tests. Some hubs help score equipment financing deals. A coach might point you to a business loan calculator before chasing an SBA microloan.

Experienced founders meet with new teams. These mentors share tips on improving your business plan. They open doors to investors and peer-to-peer networks. Startups land meetings with venture capital investors or angel groups.

Alumni insights uncover pitfalls in cash flow management or loan repayment plans. Coaches guide you toward strong loan terms, including personal guarantee limits. Accelerator cohorts push your team to refine your model and pitch ready for a seed round.

What is asset-based financing and how does it work?

Asset-based financing treats your gear and stock as loan collateral. It taps equipment loans, inventory funding and accounts receivable financing to shore up working capital. A lender may offer 70% of a pledged asset’s value.

You can use a loan calculator to gauge your funding power.

Young businesses with low cash flow or no revenue can tap this route. Lenders set clear loan terms and interest rates up front. Collateral stays on the line until you finish loan repayment.

Missing payments can cost you your gear or stock.

How to choose the right loan option for your startup?

Choosing a loan takes careful thought. You must weigh cost, fit, and future goals.

1. Calculate funding needs with a business plan that shows market analysis and financial projections so you don’t shoot in the dark.
2. Check your credit score; high marks win lower interest rates on term loans or working capital loans.
3. Compare quotes from banks, credit unions, or SBA microloan programs to spot origination fees of 0.5% to 8%.
4. Scout peer-to-peer lending sites and Kiva loans for flexible personal guarantee terms and small business financing.
5. Match loan type to purchase, like equipment financing, inventory funding, or accounts receivable financing.
6. Use a business loan calculator to test cash flow under different repayment terms and interest rates and avoid surprises.
7. Ask if lenders need collateral or a personal guarantee, or if they will take a down payment on assets.
8. Balance debt options like merchant cash advance against long-term loans for working capital.
9. Weigh personal savings, small business grants, or equity financing from venture capitalists to lower debt.
10. Fine tune choice to your industry and loan purpose, keep defaulting risk low and cash back perks high.

Takeaways

Securing funding without a proven revenue stream is one of the biggest hurdles for early-stage startups, but it’s not impossible. From microloans and business credit cards to angel investors and government-backed programs, today’s entrepreneurs have more financing options than ever before. The key is to understand which capital source aligns best with your business stage, risk tolerance, and long-term growth goals. By carefully weighing the pros and cons of each option, startup founders can build a solid financial foundation, attract future investment, and move closer to turning their vision into a sustainable, thriving venture.

FAQs on Capital Loan Options for Startups with No Revenue Yet

1. What startup business loans or working capital options work with zero revenue?

You can choose working capital loans, a business line of credit, startup business loans like merchant cash advance, personal loans, or a business credit card. Each can boost your cash flow. Check a business loan calculator for terms.

2. How do SBA loans fit startup funding needs?

The SBA offers loans with low interest rates and clear loan terms, like an SBA microloan. You need a business plan and a good credit score. Lenders may ask for a personal guarantee. Check the truth in lending act info to see all fees.

3. Can I get equipment financing with no sales?

Yes, equipment loans let you buy gear and pay over time. Lenders use the gear as collateral. You avoid big down payments. You set your own repayment terms.

4. What if I have invoices or pending bills?

If you bill clients, you can use invoice financing, accounts receivable financing, or invoice factoring. Lenders buy or lend against your invoices. You get funds now and pay back when clients finish.

5. Should I tap savings or hunt for grants?

Your personal savings cost you only lost interest. You avoid new debt. You can also go after small business grants or business grants. It feels like finding free money, but the applications can test your patience.

6. What about peer to peer lending and equity financing?

Peer to peer lending links you to online lenders. Rates vary, so use a business loan calculator. For bigger draws, pitch venture capitalists or try equity financing. They share in your wins and may steer your path.