Startup Business Loans With No Revenue

How to Get A Business Loan Even If You Have A New Business With No Sales

Having your own startup company is very exciting! But let's face it, getting the business funding needed to make it happen can be a real challenge, especially if you haven't started making sales yet. But hey, no need to stress! There are ways to get the funding you need for your business without revenue.

In this article, we're going to talk about two main ways to get business loans with no revenue: through credit and collateral. We will explore how you can use your good credit and specific things of value to get the money you need to start your business.

Whether you're brand new to the world of business or you've been around the block a few times, we've got you covered. We'll explain everything you need to know in easy-to-understand language, so you can feel confident about finding the funding you need to make your business dreams a reality. Let's dive in!

We will first talk about using your personal credit to get a business loan with no revenue.

Using Personal Credit Profile For Startup Business Loans

We have two success stories from K&D Consulting Enterprises that outshines the many successes we've had in assisting clients in getting business funding. We have found that the key to obtaining business funding as a startup is to have strong personal credit which includes your personal credit score as well as your personal credit profile.

Your personal credit score is like a grade that shows how trustworthy you are with borrowing money. It's a number typically ranging from 300 to 850, with higher scores indicating better creditworthiness. Lenders use this score to decide whether to give you a loan and what interest rate to charge you. Your personal credit score is influenced by factors like your payment history, how much debt you have, and how long you've had credit accounts.

On the other hand, your personal credit profile is a more detailed summary of your borrowing history. It includes information like your credit accounts (such as credit cards, loans, and mortgages), payment history, outstanding balances, and any negative marks like late payments or defaults. Your credit profile gives lenders a more comprehensive view of your financial habits and helps them assess the level of risk associated with lending you money.

Both are important factors that lenders consider when deciding whether to fund your business, so it's essential to understand and manage both aspects of your personal credit.

We have assisted clients with using their personal credit to get business funding. For instance, one entrepreneur managed to secure over $25,000 for their business and continues to receive incremental increases in their account, thanks to a credit score above 750 and a well-rounded personal credit profile. Another client obtained $35,000 for their cleaning business, leveraging their excellent personal credit score and their credit profile that included a mortgage. Both clients were able to obtain their first round of business funding to jumpstart their business utilizing one of the partnerships we have with lenders. Type of business funding is a hybrid credit line funding source where banks provide cash to businesses on revolving accounts that are used just like credit cards.

As long as the business owner continues to use these credit lines responsibly by paying on they can get increases on their hybrid lines of credit. We typically see business owners get up to $150,000 with this business funding resource.

The next way to get a startup business loan with no revenue is to use collateral based business funding.

Collateral Based Business Funding Resource

Another avenue to secure a business loan, even in the absence of revenue, is through collateral based funding. This approach involves leveraging assets such as your 401(k) or IRA to obtain funding for your business. Here's how it works: you must no longer be contributing and no longer employed by the issuing company. You also have to have a minimum of $35,000 in the 401(k) or IRA account.

This could be a great funding resource if your credit is less than perfect, but we do advise that you have excellent credit before proceeding with funding because you would probably want a business credit card in the future.

Collateral based loans also includes the use of stocks and securities to borrow up to 90% of the value, but you must have at least $75,000 in stocks, and $60,000 in bonds and treasury.

Things We Recommend To Secure Business Funding As A Startup

Fix your credit

Your personal credit worthiness says a lot about you and how responsible you will be once you receive business funding. If your credit is not up to par, then recommend fixing your credit through a reputable credit restoration service provider. Also, any businesses seeking business funding through K&D Consulting Enterprises must go through our credit auditing service. If the business chooses, we can conduct a personal credit enhancement service before recommending complete credit restoration services.

Your personal credit score should be between 720 and 800 on all three bureaus with less than 3 inquires on your report.

Your credit score should also have a good credit mix such as a:

• Mortgage

• Car loan

• Personal Loan

• Personal Credit Cards (low utilization and high limits of $5,000-$10,000 or more)

• Student Loan

• Store Credit

Business Structure

We ensure you have the business structure requirements needed to look creditable to lenders. Remember, you are new business with zero revenue. It is important to use every resource available in your arsenal to get business funding. Here is what we recommend:

Your business should at least be registered as an LLC.

Marketing, e-commerce, technology, and consulting businesses with these NAICS codes are more favored for business funding than any other industry. It doesn't mean that you can't get business funding.

Your business must have it's own phone number and address. Avoid home addresses, po boxes, and virtual addresses. Obtain a virtual office instead.

Get a website and business email address..

Get a business bank account. Having a business bank will breathe life into your business and it the way lenders can tell when you business actually started.

Get a merchant account. You will need a merchant account in order to take payments online and in person with debit or credit cards.

In conclusion, securing a startup business loan with no revenue, is indeed possible through various avenues such as leveraging personal credit or collateral based funding. By understanding these options and taking proactive steps to strengthen your financial standing, you can increase your chances of obtaining the funding needed to turn your business dreams into reality.

To maximize your chances of securing business funding as a startup, consider implementing recommended strategies such as credit restoration, establishing a solid business structure, and building a credible online presence. By taking proactive steps to enhance your creditworthiness and business credibility, you can position yourself for success in obtaining the funding needed to launch and grow your new startup.

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