Startup Business Loans With No Revenue | Gconnectpro
Lenders are unwilling to fund an unprofitable firm.
In reality, before they give you the money, the majority of lenders demand some sort of proof that your company is making money.
What Is a Startup, Exactly?
A startup is typically thought of as a business that is still in its infancy and is frequently characterized by high uncertainty and risk. A startup without revenue hasn’t made any money off its activities yet. This doesn’t imply that it isn’t making any money at all; it just means that it isn’t getting its money from its core business.
But don’t worry; there are ways to overcome this difficulty and obtain the financing required to expand your company. Here are three suggestions.
1. 0% Business Cards :
For new cards, many credit card issuers offer introductory APRs of 0%. If you can pay off the remaining balance before the promotional rate expires, this can be a great way to finance a startup without revenue.
APR Defined :
The annual percentage rate (APR) on a credit card is that figure. This is the annual percentage representation of the cost of borrowing money. This sum accounts for both the interest and any other fees related to the card. For instance, if your card has a balance of $2,000 and the APR is 18%, you would be responsible for $360 in interest over the course of the year.
How to Qualify For a 0% Business Credit Card :
You must have good or excellent credit to be eligible for one of these cards. Additionally, keep in mind that interest will still accumulate on any purchases made with the card even if you don’t carry a balance from month to month. Therefore, be sure to pay your bill in full each month.
2. Equipment Financing :
Hypothetical Equipment Financing Loan :
Let’s take an example where you want to buy a new computer for your office but don’t currently have the money. You could borrow money from an equipment financing company to buy the computer. You can benefit from having that new computer as long as you make your monthly payments and the loan will eventually be paid off.
Considerations for an Equipment Financing Loan :
There are a few things to keep in mind if you’re thinking about getting an equipment financing loan. Make sure you first understand how much interest the loan will cost you. Second, make sure you carefully read the loan’s terms and conditions so you are aware of what is expected of you. Third, make sure you can pay the bills each month.
Startups may benefit financially from equipment financing in order to purchase the equipment, machinery, or vehicles they require.
3. Invoice Financing :
Invoice financing, a kind of loan that lets businesses borrow money against their unpaid invoices, is another choice for companies that need capital but don’t have the revenue to support it. If you need money right away but are awaiting payments from customers, this is a great option.
Factoring & Discounting :
Factoring and discounting are the two distinct forms of invoice financing. Selling your invoices to a factor involves giving the buyer cash in exchange for your invoices. The factor will then obtain payment from the client on the company’s behalf. Discounting entails borrowing money based on the value of your invoices, so you receive less money upfront but won’t be responsible for collecting payments from clients.
If you need money quickly, both factoring and discounting can be excellent options. However, before choosing one over the other, it’s crucial to shop around and compare rates. Additionally, you want to confirm that the business you’re dealing with is reputable and has a proven track record.
With no money, should you apply for a business loan?
In the following situations, applying for a business loan even with little to no income may make sense.
You’re waiting to get paid :
Many companies (almost all B2B firms, including those in construction, trucking, consulting, etc.) operate on a contract basis, and payment is occasionally delayed for several weeks or even months after services are provided.
These businesses, however, do not have the luxury of delaying the start of the subsequent project, job, or contract because doing so would result in costs. At that point, cash flow issues start to arise, at which point financing or invoice factoring may make sense.
You need resources to grow :
A growing business cannot be supported by startup-sized resources. Small-business loans are crucial because larger businesses require larger sums of capital. They could assist with stockpiling, hiring more personnel, or opening new locations.
Consider options like micro-loans and business credit cards to inject some money into your company if you’re a startup with no revenue but a strong financial forecast.
Your personal and business finances are mixed :
Separating personal and business finances is challenging. It can be challenging to view your personal and business cash flows as separate even if they are.
It’s all too simple to take out too much money from your personal account to cover a business bill or other ostensibly one-time expenses. This might lead to the dreaded “non-sufficient funds” error for your personal account and indicate that you need to raise special business funding.
Gconnectpro Unsecured Business Loan :
You can also try your luck as an “unsecured” borrower if you’re applying for loans with little to no established financial history.
Unsecured business loans are determined by your company’s creditworthiness rather than any possible collateral (such as equipment). In addition, they have longer repayment terms and lower interest rates than secured loans.
At Gconnectpro, we specialize in providing unsecured business loans, particularly to unprofitable startups. We have been in this market for many years and have worked with both big and small businesses. Your startup is not spoiled milk; it’s an opportunity.