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Can You Get a Small Business Startup Loan With No Money?

It’s undeniable that obtaining a small business loan in New Jersey for a startup with no revenue can be a daunting experience. However, there are still several realistic options to explore. While securing a startup loan without any reserves is always possible, waiting until your business has at least six months of seasoning puts you in the best position to finance your new enterprise.

Alternatively, if your company has been operating for at least six months, but you don’t have collateral assets or documented cash flow, holding off until your financial situation improves will invariably lead to better loan terms. Of course, for many entrepreneurs, putting their launch date on the back burner may not be a viable option. If you are in immediate need of startup funding, there are several potential avenues to explore for New Jersey small business loans that don’t rely on your existing cash flow.

How Do Small Business Startup Loans Work?

Startup business loans are crucial for supplying the initial capital many entrepreneurs need to establish new businesses. A diverse array of creditors advertise this type of funding, including alternative lenders, traditional banks, investors, and credit unions. Before you can obtain a startup loan, however, you’ll typically need an impeccable business plan.

Your startup’s blueprint should be organized, well-detailed, and include financial projections that show lenders how you aim to repay the funds. You’ll also have to fill out an extensive loan application, and most lenders will ask you to stake personal collateral if you have it. Once the creditor carefully evaluates your business plan, it will be able to assess the potential success of your venture and establish the loan amount, interest rates, and repayment terms.

Once the lender approves your loan and disperses the funds, the next step is to ensure you utilize the capital effectively. Adhering to the original business plan is essential since it creates the entire premise for your loan. Straying significantly from your plan might not only destabilize the business but also make it difficult to meet repayment obligations.

Open communication with the lender throughout the loan application process for low- or no-cash borrowers is critical. Entrepreneurs should maintain transparent and proactive communication, especially if they anticipate any issues with their loan file. When you keep the lines of communication open, you’ll only make it easier for lenders to find an agreeable solution. This approach will help ensure you don’t receive a loan denial or encounter any other negative consequences during the application process.

Common Funding Options for Small Business Loans in NJ With No Money

Common Funding Options for Small Business Loans in NJ With No Money

Startup businesses, or those with limited revenue streams, will always face challenges when seeking loans from traditional banks or the Small Business Administration (SBA). Luckily, if this describes your predicament, you can still find several alternative financing options. However, even if a business lender does not require substantial revenue, showing an ability to repay the loan is paramount.

Now, let’s explore a few popular alternative funding solutions below:

Small Business Credit Cards

One popular option for startups to consider is a small business credit card. These revolving trade lines function similarly to personal credit cards. They allow businesses to borrow up to a predetermined amount based on their current credit profile before paying the balance back down so they can access the funds later.

Some cards even offer perks, such as cashback on office supplies. Nevertheless, interest rates on business credit cards can be high, while the limits are often low and may not be enough to get your operations off the ground. Likewise, if you run your balances above 25 percent of the maximum approved limit, you risk lowering your FICO score.


Microloans are another common financing option for startups. These loans, typically designed for businesses with small funding needs, offer amounts up to $50,000. Unlike traditional business loans, microloans may not have stringent revenue requirements at the time of application.

The Small Business Administration (SBA) and other government, nonprofit, and peer-to-peer agencies offer microloans as a means of supporting and encouraging startup ventures. Alternative lenders, too, like New Bridge Merchant Capital are similarly glad to review business proposals and determine if they can offer you a custom solution.

Equipment Financing

For businesses requiring costly industrial tools and machinery, equipment financing is often the most viable option, even without significant revenue. With this type of loan, the value of the equipment itself serves as collateral rather than your cash flows.

As a result, lenders may be more inclined to provide loans to startups that use valuable equipment. This option enables businesses to acquire the necessary tools for launching their new enterprise while spreading out the costs over time. The prospective lender should be able to offer a manageable equipment financing repayment plan to help you navigate the early stages of your operations successfully.

How Should You Approach Startup Funding With No Revenue?

Financing for your small business in New Jersey might seem next to impossible, especially if you lack sufficient earnings. That aside, there are steps you can take to increase your chances of securing a startup business loan even when you don’t have much cash on hand.

Begin by evaluating your assets. Lenders need to ensure you can repay the loan, so even if you’re not generating income, consider what other positive attributes you can offer. For example, if you can stake high-priced personal collateral or a strong credit history, this will present you in a more favorable light with business lenders.

Creditors often require a certain amount of money in your business bank accounts before considering your loan application. However, other lenders may be more forgiving of cash flow issues if you meet other loan requirements or have a positive credit history. Therefore, it’s essential to understand what the lending institution is looking for before applying.

Evaluating your own risks is also crucial when applying for a loan. Loan terms reflect the level of risk for lenders, with riskier loans typically having higher interest rates and shorter repayment periods. If you’re not confident in your ability to repay a loan without money in the bank, you may end up borrowing more funds to pay off existing debts. This can lead to a difficult cycle of debt that can be hard to break free from.

What Are the Pros and Cons of Taking on a Business Loan With No Funds?

Taking out a small business loan in New Jersey does have its pros and cons, especially when you lack the funds to start with. While it may seem challenging to secure funding without any existing revenue, there are certain situations where seeking a startup business loan can still be beneficial.

One of the main reasons startups look to small business funding is because they’re trying to get their operations off the ground. Yet withal, launching a new company requires initial capital for rent, inventory, equipment, payroll, and other operational expenses before you can start generating sales. If you anticipate only a short time frame before you realize substantial income to cover your loan payments, borrowing upstart money with no cash flow may be worthwhile.

Additionally, loans can be invaluable when you need funds to grow your business shortly after launching it. As your business expands, you may require additional facilities, inventory, payroll, and working capital. If you haven’t accumulated significant savings yet, loans can serve as the catalyst for growing your startup.

Furthermore, if your business operates on an invoicing system where customers expect payment at a later date, having access to cash is always crucial. Many businesses face the challenge of unpaid invoices, which complicates their revenue streams. In such cases, factoring or accounts receivable loans can be advantageous. Factoring companies allow you to sell a fraction of your invoices in exchange for an advance of a portion of the invoice amount, thereby converting your unpaid invoices into immediate cash.

Despite these advantages, there are also potential downsides to taking out a small business loan with no revenue. One significant concern is the obligation to repay the loan along with interest and fees, regardless of how well your business performs. If your business fails to generate sufficient income to meet these financial obligations, this could lead to further financial strain and prospectively force you to shutter entirely.

Another consideration is the potential impact on your credit score. A small business loan can affect your creditworthiness if you can’t make timely repayments. This could make it more challenging to secure future loans or lines of credit for your company.

Moreover, taking on debt without a reliable revenue stream can create additional stress and pressure, as you’ll need to ensure that your business thrives and meets all its financial obligations. It’s essential to carefully analyze your revenue projections and assess whether taking on a small business loan is viable under your specific circumstances.

Likewise, obtaining a loan as a startup or with no revenue history may result in less favorable terms and higher interest rates. Lenders often view these businesses as higher risk, which can lead to more stringent loan conditions. It’s crucial to thoroughly research and compare different lenders to find the best terms possible for your business.

Alternative Funding Options for Startups With No Revenue

For startups in New Jersey that are low on revenue and reluctant to take out a business loan, there are alternative funding options worth considering. Early-stage startups, for example, may be able to secure funds through venture capital or crowdfunding. Venture capital involves receiving investment in exchange for a percentage of ownership in the business.

This method of funding does not involve interest charges or repayment requirements, which can be attractive. However, understanding that accepting venture capital means giving up a portion of your equity in the business is imperative. Venture capitalists typically seek companies that display the potential for rapid growth and high profitability upon sale.

Some startups rely on crowdfunding, although this is a less reliable option. Crowdfunding is where entrepreneurs solicit donations from friends, family, and community members to support their businesses. Unlike venture capital, crowdfunding does not require giving up equity in the business. However, as mentioned, it may be challenging to attract enough funding through this method.

For established businesses in New Jersey, applying for small business grants is a viable alternative. Grants are essentially free money that does not need to be repaid. They award organizations with the funds and do not claim ownership in the business. Aside from general small business grants, there may also be case-specific grants available for minority-owned businesses and specific industries, depending on the nature of your startup.

While these alternative funding options may seem appealing, they also come with their own set of drawbacks. Venture capital, for instance, can result in a loss of control and decision-making power as investors gain a stake in the business. Additionally, crowdfunding campaigns require significant promotional efforts and may not always reach their fundraising goals. As for grants, they are usually highly competitive and not guaranteed, meaning businesses may invest time and effort in the application process without ultimately receiving any funding.

Looking for an Expert Consultation on Financing Your Next Startup?

While launching a new business with no money in New Jersey may seem like moving mountains, it is not entirely impossible. Small business loans can provide the necessary capital to get your startup off the ground and set it up for long-term success. Carefully planning and adequately researching all the available financing options can lead to the right startup loan that meets your needs without breaking the bank.

If you are considering launching a business in New Jersey and need financial assistance, don’t hesitate to reach out to New Bridge Merchant Capital. Our financial experts remain dedicated to helping entrepreneurs like you navigate the world of startup funding.

Contact New Bridge Merchant Capital today at 844-228-0593 for a one-on-one consultation. We’ll help evaluate your financing options. Or, consider starting an online loan application now. We’re ready to help you take the first step toward turning your business dreams into reality. Remember, with the proper support and financial backing, you can overcome virtually any obstacle and achieve entrepreneurial success in The Garden State.

Work With a Leading Commercial Lender

At NewBridge Capital Solutions, our loan products can help businesses of all sizes. With our exceptional customer service and reputable funding, we have become a trusted leader in the commercial finance industry. If you want to apply for a term loan that can provide working capital for your business, make sure to contact us.
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