Lenders typically evaluate a few key criteria:
Cash flow & repayment ability — if you have no revenue, demonstrating ability to pay is harder
Credit history — your personal or business credit may be a primary factor
Collateral and guarantees — lenders may require assets or personal guarantees
Business plan, projections, and founder strength — your story, traction, and team matter A LOT
Because of that, many traditional term loans are off the table early. But there are options.
These are the best paths for very early-stage ventures:
These are small loans (up to $50,000) made via intermediaries (nonprofits, community lenders). The SBA does not lend directly. Small Business Administration
Pros: more lenient standards, mission-driven lenders, technical assistance
Cons: lower amounts, shorter terms, may require personal guarantee or collateral
If you must purchase machinery, technology, or equipment, these loans use the equipment itself as collateral, reducing the lender’s risk.
Pros: easier to justify because there's a tangible asset
Cons: can’t use for working capital; terms depend heavily on credit
While not a “loan” in the classic sense, a business credit card is one of the few credit instruments new startups might qualify for.
Pros: quick access, revolving credit, rewards
Cons: high interest if you carry a balance, limits may be small
Some fintech and nonbank lenders will lend based more on founder profiles, projections, or future potential than current revenue.
Shop lenders that specialize in startup funding or early-stage risk. Be careful of high fees or predatory terms.
Platforms where multiple investors fund your business (debt crowdfunding) or you borrow from individuals.
Pros: can get capital without traditional bank underwriting
Cons: higher cost, platform fees, and you must convince many small investors
Although not a loan, grants don’t need repayment and are ideal when you can qualify. State, local, or federal programs sometimes offer startup grants, innovation grants, or small-business incentives.
Pros: no repayment, supports legitimacy
Cons: highly competitive, requires strong application and compliance
Because you have no revenue, strength in other areas becomes critical:
Strong Business Plan & Projections: Show how you’ll generate revenue and when
Personal Credit & History: Your personal credit may carry much weight early
Personal Guarantee or Collateral: Be ready to back the loan with assets or signature
Minimal Debt Load: Lenders prefer clean balance sheets
Traction or Pre-Sales / Letters of Intent: Even nonbinding demand signals help
Apply to Lenders With Startup / Mission Focus: Microloan intermediaries, CDFIs, nonprofit lenders
High interest / hidden fees: Startups are often charged premium rates
Short repayment periods: Some “startup loans” require fast paybacks
Overborrowing: If revenue doesn’t materialize, debt can sink you
Predatory models like some MCAs (merchant cash advances): Very high cost and risk, especially for businesses with no revenue