Business Loans

Can You Get a Startup Business Loan with No Money or Credit Check?

Oct 10, 2023 • 10+ min read
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      Every great business has to start somewhere. The founders of Apple and Amazon launched their business dreams in garages. Samsung began as a grocery store. Coca-Cola originally made its product in jugs and sold the now-famous soda for a nickel a glass at a local pharmacy.

      Many businesses start from nothing before becoming something special. Yet it’s also true that, when the right moment arrives, securing the right funding for your startup can be pivotal in getting your business off the starting block and on the path to success.

      If you’re looking for financing to get your startup off the ground, the good news is that there are numerous ways to get funded. Even as a small business owner with no revenue and no credit (or bad personal credit), you might be able to find a startup business loan.

      Getting a startup loan with no revenue.

      Getting a startup loan with no money or revenue.

      Getting funding as a brand-new startup with no money can be a challenge. The majority of small business loans have at least some minimum revenue requirements. So, if you have the ability to wait until your business is earning some money, it could open the door to more financing options and more attractive borrowing terms. 

      In the meantime, there are at least two potential ways to get a loan for your startup before it begins earning revenue.

      Equipment financing

      Some equipment financing lenders (though not all) are willing to work with startups. These lenders may have no minimum monthly revenue requirements and no minimum time in business requirements for applicants to satisfy. The collateral your business is purchasing secures the loan and reduces the risk for the lender. However, you may likely need decent personal credit to qualify for this financing option, depending on the lender.

      SBA microloans

      An SBA microloan provides financing of up to $50,000 for small businesses. The loans are intended to support underserved communities and are distributed by nonprofit or community microlenders. The requirements to qualify for a microloan will vary by the lender. Some will review your credit score and personal finances to qualify you for a loan while others will want to see a longer financial history for your business. While some of these lenders may not require positive business cash flow, they may still require a personal guarantee and/or collateral to secure the loan.

      Getting a business loan with no credit.

      Getting a business loan with no credit.

      When you apply for a business loan, many commercial lenders will review your credit history to get a sense of how you’ve handled debt in the past. Reviewing previous credit history and checking your credit scores helps lenders predict risk. The problem for many entrepreneurs is that their new business hasn’t yet had a chance to establish a track record when it comes to managing credit obligations. 

      If a lender’s usual qualification metrics are based on longevity (aka time in business and length of credit history), they need to take a different approach for startups. Rather than look at business credit, a lender may focus on your personal credit score and overall business experience instead. 

      This alternative approach to risk assessment can work because a business owner’s personal credit scores can also provide a lender with valuable predictive analytics. At its core, a credit score (both business and personal) is a formula that lenders use to predict whether you’ll repay the money you borrow as promised. And that key information—the likelihood of repayment—is what a lender really wants to know when you apply for a loan.

      See if your business is eligible for financing.

      How much money are you looking for?
      The best small business loans with no credit check.

      The best small business loans with no credit check.

      There are many loan products available to small business owners. Yet entrepreneurs with low credit scores or those who prefer to avoid a credit check for other reasons often find the most success with invoice factoring, ACH loans, or business lines of credit. 

      The qualification criteria for the three financing options above depend less on your credit scores and more on other factors. This doesn’t mean you will receive an automatic approval even with a very poor credit score. But if you have experience in your industry and some positive credit history, you may have a fighting chance at qualifying.

      Below are some important details to consider regarding these three financing options:

      1. Invoice factoring

      With invoice factoring, the majority of lenders do not have a minimum credit score requirement. As a result, your application for funding from a factoring company may not involve a credit check at all. Here’s an overview of how this financing option works. 

      Invoice factoring involves selling your company’s outstanding B2B invoices to a financing company for cash. In general, a factoring company might advance you 70% to 90% of the value of your invoices. The factoring company then works directly with your client to collect the money owed when the invoice due date arrives. Once it collects the funds, the factoring company will return the remaining balance to you, minus a factoring fee (often 3% to 5%).  

      Lenders don’t typically check your credit when you’re seeking financing through an invoice factoring arrangement. Instead, the credit of your customers could matter. With this type of financing, a factoring company will collect payment from your customers, not you or your business. Therefore, your customer’s creditworthiness could impact your ability to qualify for financing and the fees a lender charges you as well. 

      2. ACH loans

      An ACH loan could be another financing solution to consider if you need business financing for bad credit or no credit. Most lenders that issue ACH loans require a minimum credit score of 500 to 625. (These lenders often perform only a soft credit inquiry that won’t impact your credit score.) However, a handful of ACH loan lenders may not require a credit score review at all. 

      One reason ACH loans are so popular among entrepreneurs is their rapid funding speed. Once a lender approves you for an ACH loan, you can often receive your loan proceeds within a couple of days. This funding agility can present a substantial advantage for a small business in the startup phase.

      Of course, just as with ultra-fast sports cars, you are likely to pay a premium for the speed of ACH loans. On either a daily or weekly basis, the lender will take an agreed-upon amount from your bank account as an ACH deduction. (Hence, the name.) The amount you can borrow tends to be lower than the loan amounts you might receive via other financing options. But many small business owners feel that the trade-off is fair, thanks to the convenience that ACH loans provide. 

      Apply for an ACH loan

      3. Business lines of credit

      Lenders are likely to review your credit when you apply for a business line of credit (LOC). However, some lenders will only perform a soft credit inquiry to assess your business LOC application. (Remember, soft credit inquiries do not have any impact on your credit score, unlike hard credit inquiries that have the potential to impact your credit score.) Other lenders may perform a soft credit check for the pre-approval process and follow up with a hard credit inquiry at the time of funding. 

      A business line of credit is similar to a business credit card in several ways. An LOC comes with a credit limit, often ranging from $1,000 to $500,000. Depending on the lender, you may have access to the funds within one to two weeks. The financing typically has a one- to two-year maturity.

      Perhaps the best feature of a business LOC is its flexibility. If your restaurant needs a new fryer, buy it. If you need to hire employees, go for it. If you want to bulk up your inventory, do it. Nearly any expense that goes toward starting and sustaining your business is fair game.

      Like credit cards, this type of financing also gives you access to revolving credit. This differs from most loans, which provide you with a lump sum of money up front. With an LOC, you simply use the credit line whenever necessary. There’s no pressure to spend it, and you’ll pay interest only on the funds your business borrows.

      Apply for a Line of Credit

      Alternative forms of financing for your startup.

      Alternative forms of financing for your startup.

      It’s not always easy to access business funding as a new startup. According to Gallup, 77% of small business owners use personal savings as a source of initial capital. Nonetheless, there are alternative ways to finance your business dreams that don’t involve potentially draining your personal bank account. 

      Here are a few alternative business funding options to consider. 

      • Crowdfunding Crowdfunding is a way to raise money online for your young business—either by seeking loans from multiple investors (debt crowdfunding), asking for donations (donor crowdfunding), selling off small portions of your business (equity crowdfunding), or offering incentives for contributions (reward-based crowdfunding).
      • Business Credit Cards A business credit card could be a good financing option for startups with no revenue and no established business credit score. Depending on the type of business credit card you apply for, you may need good personal credit to qualify. But there are some options (including secured business credit cards) for small business owners with no credit or bad credit. 
      • Family and Friends Some small business owners are able to borrow money or raise investment funding from family members and friends. If you’re fortunate enough to have this option available to you, be sure to consider the risk up front. Should your business fail or if you’re unable to repay a loan from a loved one, these complications could damage important relationships. 
      • Grants For a startup, small business grants can be an appealing way to raise money since the business doesn’t have to repay the money it receives. Yet with grants, you might also face a lot of competition. It can often be a challenge to stand out from other applicants where small business grants are concerned.
      How to get a startup business loan with no money or revenue.

      How to get a startup business loan with no money or revenue.

      Decide how much you need

      A key step in finding the loan that matches your business needs is identifying how much money you’ll need to borrow. Every lender has a different range of financing they are comfortable offering. Therefore, you probably wouldn’t search for a $5-million loan in the same place you’d search for a $5,000 loan.

      Determine your timeline

      Likewise, you should figure out how quickly you need the money you borrow to arrive. Some loan proceeds may be available in days or hours. For other loans, the funding process could take weeks or months.

      Determine your budget

      Next, crunch the numbers and see which loan gives you the best bang for your buck. There are plenty of easy-to-use loan calculators available online. So don’t worry if math isn’t your strong suit. (Note: It’s wise to compare multiple loan options to make sure you’re getting the best deal available for your small business.) 

      Be aware that small business lenders often use inconsistent metrics when disclosing the cost of financing. When disclosures vary from lender to lender, it can be difficult to compare them accurately and make an informed decision.

      The Innovative Lending Platform Association saw this problem and decided to come up with a solution. The association partnered with several of the top lending platforms in the industry to create a comparison tool they call SMART Box™ (Straightforward Metrics Around Rate and Total cost). With this resource, you can decipher various pricing metrics and find a common language between financing options. 

      Several states have also passed commercial loan disclosure bills that require financiers to disclose the total dollar cost of the transaction along with any prepayment fees.

      Work to bolster your credit score.

      Work to bolster your credit score.

      It’s true that invoice factoring, ACH loans, and sometimes even business lines of credit can provide financing even when your credit is unimpressive. But that’s no reason to accept the status quo. You should put effort into improving your credit. 

      Working to earn better credit could open doors to you in the future. Not only can good credit help you qualify for more loan products, but it may also help you receive more favorable interest rates and repayment terms from lenders.

      Paying credit obligations and vendor accounts on time is the best way to improve your business credit scores. (And, of course, you’ll want to make sure those accounts report to the credit reporting agencies.) 

      To maintain stellar payment history, sign up for automatic payments whenever possible. If you can’t sign up through the payee, consider adding them to your banking system. At the very least, set up a regular calendar reminder so you won’t be forced to rely solely on your memory.


      Let’s be real: it’s pretty challenging for startups to secure small business loans, especially when you’re new on the scene with no revenue to show. Traditional lenders typically look for a history of profitability and solid cash flow—two things that most startups are still working hard to establish. However, you can increase your chances of approval by putting together a solid business plan, laying out a clear repayment strategy, and offering a personal guarantee or collateral.

      Absolutely, getting a loan for your startup without collateral might seem like a tricky path to navigate, but it’s not off the table. There’s a variety of unsecured financing options out there that rely more on credit scores, business potential, and a well-crafted business plan than on assets. Think of it as lenders betting on your vision with you. They understand that not everyone comes to the table with tangible collateral, especially in the early stages. That said, do keep in mind that interest rates for unsecured loans can be higher, and terms might be stricter. But as your business grows, these investments can sometimes prove to be the jumpstart you needed.

      Stepping into the entrepreneurial world without a credit history can definitely raise some eyebrows, but it doesn’t close the door on securing a startup business loan. Sure, credit scores are one part of the equation, but they’re not the whole story. Alternative lenders may be willing to focus on your business plan’s strength, your market’s potential, and any industry experience you bring to the table. It’s all about painting a picture of your business that says, “I may be new to the game, but I’ve got the strategy to win.” Keep in mind that these loans might come with higher interest rates or require a more personal approach to guarantee you’re a safe bet.

      Quickly compare loan offers from multiple lenders.

      Applying is free and won’t impact your credit.

      The information in this blog is for informational purposes. It should not be used as legal, business, tax, or financial advice. The information contained in this page is Lendio’s opinion based on Lendio’s research, methodology, evaluation, and other factors. The information provided is accurate at the time of the initial publishing of the page (July 26, 2022). While Lendio strives to maintain this information to ensure that it is up to date, this information may be different than what you see in other contexts, including when visiting the financial information, a different service provider, or a specific product’s site. All information provided in this page is presented to you without warranty. When evaluating offers, please review the financial institution’s terms and conditions, relevant policies, contractual agreements and other applicable information. Please note that the ranges provided here are not pre-qualified offers and may be greater or less than the ranges provided based on information contained in your business financing application. Lendio may receive compensation from the financial institutions evaluated on this page in the event that you receive business financing through that financial institution.

      About the author
      Michelle Lambright Black

      Michelle Lambright Black is a nationally recognized credit expert with two decades of experience. Founder of—an online community that helps busy moms take control of their credit and finances—Michelle's work has been published thousands of times by FICO, Experian, Forbes, Bankrate, MarketWatch, Parents, U.S. News & World Report, and many more.

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