How To Get A Startup Business Loan With No Money?

Emily Morgan

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How To Get A Startup Business Loan With No Money

Starting your own business is prestigious and thrilling for a lot of people. As a matter of fact, most of us dream about starting our own business. Unfortunately, very few of us actually take the initiative to create our own enterprise.

Having your own business is prestigious and thrilling because it could propel you into lots of wealth, even as you cheerfully tackle new and different challenges every day. At the same time, launching an enterprise isn’t easy for several reasons.

Difficulties in Opening New Business

If you are planning on opening a new business, here’re some common difficulties that you could come across. Most of these difficulties require simple solutions. Only a few might be complicated and could require some external help or extra effort.

Here’re some of these common difficulties in opening a new business.

Investment in the Business

Getting investments or money to open a business is the biggest problem that most people face. As a result, they don’t open a business and kill their dreams of becoming an entrepreneur. Such people don’t have enough money to invest in opening a business or imagine their savings wouldn’t be enough.

Then we have another category of entrepreneurs that wish to take a business loan but can’t get one for some reason. Most people are unaware of the various amazing ways to get money to open a business.

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No Clear Business Idea

Lots of people want to open a business. However, they don’t have any clear ideas about the type of business that they can open. Such persons believe that a copycat idea of other successful businesses would also work for them, but they’re unsure.

Others simply don’t know or realize that they could use their professional skills or education or even a hobby or passion to get a superb idea that could prove useful to launch a new business.

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Fears and Lack of Initiative

And final, fears, self-doubt and lack of initiative are the greatest enemy of every aspiring businessperson. In the first place, most people fear failure. They believe the business will fail. Such persons lack self-confidence and usually have lots of self-doubt over their own abilities.

These lead to an overall lack of initiative. This means instead of taking steps to launch a business, they lose initiative and are content with a job. In some cases, such persons also warn others against opening a business. 

The problems you have in getting a business loan or money to invest in an enterprise can be easily overcome. However, overcoming the other two hurdles requires a change of mindset and personal effort.

If you’re among those who wish to launch a business and don’t have enough money, here’re some ways to get a business loan without any money.

Continue reading.

Understanding Business Loans

Actually, there’re three kinds of business loans that’re common around the world. I will write about these briefly so that you can understand the differences.

Loans for Working Businesses

The first category of loans is for working businesses. That means you already have a business that’s up and running but doesn’t have money for some important activities.

These activities could include business expansion, adding more products or services, buying new machinery or equipment, relocating to bigger premises, property purchase for the business or entering newer markets. The US government’s Small Business Association also gives easy loans to existing enterprises.

In such cases, you can easily get a bridging loan or business loan from a bank, even if you have no money. In some cases, the bank will demand collateral, such as assets that your business owns. Or, they could ask you to provide one or more guarantors for the business loan, depending on the amount of money as well as laws, terms and conditions.

Loans for New Businesses

It can be tough to get a business loan if you’re setting up a new enterprise. That’s because a bank or credit union, financial institutions or other lenders would want to see how are you investing from your own pocket and savings. Also, a lender would wish to see your business plans and other details, such as partners, if any and your expertise in that venture.

If you have little money or no money to invest in that business, the lender can refuse to give you a business loan. That’s because they have doubts about whether you would be able to repay. New businesses are also known as startups. The number of startups that fail every year in the US is very high. Hence, lenders don’t want to take risks with their money.

Borrowings Through Equity

There’s also a third kind of business loan, which is borrowings through equity. This means the business gives some shares to a limited number of persons in return for some amount of money. However, in such cases, the equity is given only for a specific period of time and later, these shares return to the business owner.

During the period when lenders hold equity, they don’t get an interest. However, they get some share of the profits for a limited period only. Here, the lenders have to agree to write off the business loan amount if the venture fails to meet its expected goals for any reason. Such business loans are rare in the US but quite common in certain countries in the Middle East since interest is forbidden under Islamic religious tenets.

All these kinds of loans are fine if you have a running business or assets. What happens when you have absolutely no money and yet wish to launch a new business? Are there any types of business loans available?

If you’re hoping to launch a new enterprise and require a business loan, here’re some ways to get it. They don’t qualify as loans exactly. However, you can get some money that could help you to open a business and enter the wonderful world of entrepreneurs.

How To Get A Startup Business Loan With No Money?

There’re several ways to get some money to open a new business venture without actually taking a business loan. Some of these ways could prove easier than applying for a business loan from some bank, fintech lender, credit union or any other financial institution.

Here’re some of these simple ways:

1. Use Your Credit Card

Credit Card

If you have an unsecured credit card, it’s possible to use your spending limit for a cash advance or buy things necessary to start a business. This is the easiest way to get money for your business since most Americans hold two or more unsecured credit cards. There’re some 1.1 billion active credit cards that’re in use in the US. Surely, you might have one too.

However, all credit card borrowings, including cash advances and purchases, have a major flipside. They come with a heavy Annual Purchase Rate and cash advance interest. These could go as high as 29 per cent per year unless you settle the dues in full during each billing cycle.

This translates as having a steady cash flow so that you can clear off all debts on your credit card and save lots of APR or interest, as it’s also known.

2. Community Based Lending

Community Based Lending

There’re several organizations in the US that provide community based fundings for new and small businesses. Basically, these organizations aim to serve economically weaker communities, generating employment and reducing poverty. Their finance models have led to several success stories across the USA.

They don’t lend large amounts like commercial lenders and banks. However, you can get some finance for your new business or an existing one through community-based lending programs. Check if there’re any community-based lending programs in your area to get a business loan, even when you don’t have money.

3. Crowdfunding


One of the popular ways to raise money for a startup venture or a new business is through crowdfunding. Maybe you’re unaware, but the icon of the USA, the Statue of Liberty, was actually built in France and shipped to New York for installation on Liberty Island in the New York Bay.

However, the New York City admin and other US government agencies could not raise or spare enough funds and even refused money for the installation of the Statue of Liberty at its current location.  

Historical records reveal that in 1885, Joseph Pulitzer, the owner of the newspaper New York World ran a series of emotional appeals on its pages. These appeals attracted over 160,000 Americans that donated small amounts of money- in most cases- less than a single Dollar. The crowdfunding campaign raised the amount necessary to complete the Statue of Liberty project.

This specific incident is now cited as an example of the power of crowdfunding in the US. There were various successful crowdfunding projects after the Statue of Liberty. Today, there’re scores of crowdfunding platforms in the US and abroad from where you can seek finance for your business. 

3. Venture Capital

get a startup loan by Venture Capital

If you have a genuine business idea and a superb business plan, you might be able to attract someone that provides venture capital to startups. This sounds very appealing. However, it’s worth knowing that venture capitalists are very selective about the type of businesses they will finance. If your idea and business plans fail to attract a venture capitalist, you will remain empty-handed. A venture capitalist could be an individual or even a group of investors or an organization.

At the same time, most venture capitalists will provide only the seed money or the cash you need to launch the business and sustain it during the early months. They will expect returns on their capital according to the agreements you sign with a venture capitalist. In most cases, a venture capitalist will back out of providing more money after the first year or the second year.

Also read: 5 Tips To Writing A Killer Business Plan

4. Startup Incubators & Accelerators

Startup incubators or startup accelerators won’t really give you a business loan. Instead, they will charge some fees to fine-tune your business plan and startup idea and concept, among other things. They are one of the first places that everyone that wishes to open a new business generally approaches.

While startup incubators and startup accelerators won’t give you money, they could help you contact some venture capital firms or individuals or even crowdfunding platforms that might be useful to attract investments in your business. The flipside, though is the fees they charge, which can be quite high at times.

5. Angel Investors

Angel Investors

There’s not much of a difference between venture capitalists and angel investors. Broadly speaking, angel investors are professionals such as successful businesspersons, doctors and surgeons, engineers or experts in specific fields. They have a lot of spare cash due to their success and would like to invest in a business venture in their field.

You might be able to get hold of some angel investors and get financing for the business. However, you will have to agree to certain terms and conditions of angel investors. There’re also some areas where an angel investor can have some rights over your business, similar to venture capitalists. 

6. Business Grants

Business Grants

Just in case you’re unaware, there’re lots of organizations – both private and government ones, that provide business grants in specific fields. They give grants to various businesses that’s aiming for innovation in areas such as healthcare, prevention of diseases, reduction of poverty and education, to name a few. You can find a list of some of the grants and eligibility from this link of the US Chamber of Commerce.

Grants are also available for women, persons with disabilities, entrepreneurs wanting to open businesses in uncatered areas and minority groups and ethnicities. Since these are grants, you generally wouldn’t have to repay the amount of money. However, getting a grant involves fierce competition with other applicants.

7. Money Launderers and Mafia

Money Launderers and Mafia

Regardless of anything, never go to money launderers and mafia for a business loan. In fact, there’re several instances in the USA of criminals sponsoring what would otherwise have been a legit and profitable business. There have been cases where South American drug mafia, banned terrorist organizations, and money launderers have trapped unsuspecting entrepreneurs. 

Money launderers, mafia and terrorist groups usually give business loans to entrepreneurs. They conceal details about the sources of their money. Instead, they provide business loans or funding through ‘shell organizations.” The incidence of such funding has reduced over the years due to the US Patriot Act and other legislations enacted and enforced after the 9-11 terror attacks on the US.

Remember, you can get into very serious trouble with the US and international law for accepting funds or business loans from shell organizations operated by drug syndicates, weapons mafia, terrorists and money launderers.

8. Family, Friends and Social Circles

Family, Friends and Social Circles

Don’t expect to attract millions of Dollars from them. But yes, your family, friends and social circle can provide small amounts of money for you to open or sustain a business. While they might not charge interest in some cases, remember, you have to repay them as promised. 

Defaulting on small loans taken from family, friends, and social circles can have a very bad impact on your relationships. You might end up being lonely simply because your business failed and you weren’t able to repay the money you borrowed. Therefore, be very clear about terms of repayments when taking money from family, friends and relatives.

9. Personal Loans

Personal Loans

If you have a good credit score, banks and credit unions could further you a personal loan. These personal loans can be used for funding a business too. You don’t have to state the reasons for taking a personal loan.

However, a personal loan works like a double-edged sword. Defaulting means attracting litigations and damage to your credit ratings. You might require several years to recover from these.

10. Take a Partner

Take a Partner

Should you have a single-owner business that’s already up and running or wishes to launch a new startup enterprise, take a partner that would be willing to put in some money in this venture? Of course, you would have to give him some share of the business, depending upon how much they invest. Yet, this can be easier than getting a business loan from other sources.

While selecting a partner, ensure they know something about the nature of your business. Often, a partner can bring in some expertise that your business needs. That way, you don’t need to hire extra staff or freelancers. This translates to shorter payrolls and lesser expenses for your business, resulting in more profits.

11. Start a Side Hustle

Start a Side Hustle

A side hustle can help you earn some extra money that you could use for investing in a new or existing business. There’re plenty of side hustles, including freelancing or one-off side gigs available in the US that pay a lot of money. That way, you don’t need to depend on any external sources to look for a business loan or invest in your startup. You could raise plenty of money with your own efforts.

You can start freelancing using your own skills. There’re several superb freelancing platforms, such as and, among others. Of course, it would require some extra effort to find freelance work.

Alternatively, take one-off side gigs for a short period. These could be anything from driving for Uber and Lyft or delivery jobs for Amazon Flex and Postmates or DoorDash, among others. For example, Amazon Flex pays $25 per hour, and you have a delivery slot of four hours. This means a good $100 per day or between $2,500 to $3,000 per month. 

Wrap Up

Try any of these 12 superb ways to raise money for a business when you don’t have sufficient funds. Loans are hard to find and get. In such cases, these choices can help you raise enough money.

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