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How To Start A Business With No Money

Published By Janet Gershen-Siegel at March 28th, 2018

Are you trying to start a business with no money? Why not consider these startup funding options? Get your funding without emptying your wallet.

Have you got a brand-new startup? It can feel like a money pit at times, can’t it? While that is a relatively common issue with new business owners, it does not need to be like this.

You should count on to put some of your own personal assets into a startup business, but that should not be the sole place you turn for financing. In order to help you out, here are a few other ways of funding your startup business which don’t involve rooting through your couch cushions, trying to find loose change.

Angel investors and venture capitalists

These are not exactly the same thing. An angel investor will generally invest in early-stage or startup businesses in exchange for a 20 – 25% yield on their financial investment.

Venture capitalists will give cash in order to help build new startups which the VCs feel have both high-growth and high-risk potential. These can be fast-growth businesses with an exit strategy already in place, and they can get up to tens of millions of dollars for investment, networking, and growing their business. Basically, this is a gamble on future profits. Also, venture capitalists will often plan to recover their investment within a 3-5 year period. They will also, often, want to obtain a chunk of your startup if not a controlling stake, so recognize that.


You may wish to try a service like Kickstarter. However, see to it you read the particulars, as many crowdfunding platforms will demand that you give all of the funding back if you do not make your objective by the end of the crowdfunding campaign (Indiegogo has a flexible funding option). Also, crowdfunding websites will take a portion of the contributions, and they often will push to have you deliver on your promises (so you’ll have to actually manufacture that electric spaghetti twirler or anything else your business is supposed to be doing).

Donors can become weary of crowdfunding spiels, and uncomplicated businesses may not do so well. Crowdfunding tends to work best for scenarios where the donors can personally connect with the product or service, so product lines which aren’t quite in stock yet, or creative endeavors, can do well. But conventional widgets which are not about to really change are not going to catch the attention of brand ambassadors and, by extension, they probably will not get contributors too excited.


Another choice is invoice factoring, where your startup gets a percent of the cash from uncollected invoices fronted by the factoring company. The factoring company then goes directly after any business which owed you cash, and collects on it on their own. Hence if a merchant owes your startup company $1,000 on a twelve-month repayment basis, you might hand that bill over to the factoring company in order to get something like $950 in a week. The factoring company would then collect the total from the retailer. This enables you to extend credit or negotiate longer-term payment plans in exchange for other, more advantageous terms (including getting a retailer on board with your new startup business) without holding a bunch of what are essentially IOUs for months at a time.

The Small Business Administration

There is also the SBA, which has several CAPLines loan programs and SBA Express. They do not provide the loans; rather, the SBA sets loan guidelines. It’s their lending partners who really make the loans. The SBA also furnishes research grants if your startup business participates in scientific R & D.


Another alternative is the microloan, which you cannot even obtain from a standard lending institution. In its place, you get a microloan from a microlender. Try the Association for Enterprise Opportunity to find a nearby microlender. A microloan is just what it sounds like; it’s not a great deal of cash. Still, if your startup business only needs something like $500 – $35,000, then a microloan could do the trick.

Bank Loans

Need a lot more than a microloan? Then apply for a bank loan for your startup company. Prepare yourself to provide collateral, which could be inventory or real estate or such. Loans must be repaid punctually otherwise your startup business’s credit score will suffer.

Business Credit Cards

One final choice is business credit cards. However, be aware that company credit cards must be repaid the same as individual credit cards. A very high credit utilization rate (the amount of credit you use as divided by the total amount of credit available to your startup company) of over 30% can reduce your business credit scores and make it harder to borrow money or get another business credit card, so you must be vigilant with these and pay them off as soon as is practical.

Leave the change in the couch cushions for another day and get your startup business funded the proper way.

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