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How To Start A Business With No Money

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

How To Start A Business With No Money

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

Find Out How to Start a Business with No Money

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.

How to Start a Business With no Money: Lean on 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.

How to Start a Business With no Money: Crowdfunding

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.

How to Start a Business With no Money: Turn to 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.

How to Start a Business With no Money: If You Don’t Need Much, Go for Microloans

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.

How to Start a Business With no Money: Use Business Credit Cardshow to start a business with no money Credit Suite2 - How To Start A Business With No Money

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.

How to Start a Business With no Money: Build Business Credit

Business credit is credit in a small business’s name. It doesn’t attach to a business owner’s personal credit, not even if the owner is a sole proprietor and the solitary employee of the company. 

Thus, a business owner’s business and consumer credit scores can be very different.

The Benefits

Due to the fact that business credit is distinct from personal, it helps to protect a business owner’s personal assets, in case of legal action or business bankruptcy.

Also, with two distinct credit scores, an entrepreneur can get two separate cards from the same vendor. This effectively doubles buying power.

Another benefit is that even startups can do this. Going to a bank for a business loan can be a recipe for frustration. But building business credit, when done properly, is a plan for success.

Consumer credit scores rely on payments but also various other components like credit use percentages. 

But for company credit, the scores truly only depend on whether a company pays its bills punctually.

The Process

Establishing small business credit is a process. It does not occur automatically. A business has to proactively work to develop business credit. 

Yet, it can be done easily and quickly, and it is much more efficient than establishing personal credit scores. 

Merchants are a big aspect of this process.

Carrying out the steps out of sequence causes repetitive denials. No one can start at the top with business credit. For example, you can’t start with retail or cash credit from your bank. If you do, you’ll get a rejection 100% of the time.

Company Fundability

A company has to be fundable to loan providers and merchants. If you want funding, then fundability is a way how to start a business with no money.

As a result, a business needs a professional-looking web site and email address. And it needs to have site hosting from a merchant such as GoDaddy. 

And, company phone and fax numbers need to have a listing on 411. You can do that here:

Also, the business telephone number should be toll-free (800 exchange or similar).

A small business also needs a bank account dedicated purely to it, and it has to have all of the licenses necessary for operating. 


These licenses all have to be in the specific, accurate name of the company. And they must have the same small business address and phone numbers. 

So, bear in mind, that this means not just state licenses, but potentially also city licenses.

how to start a business with no money Credit Suite3 - How To Start A Business With No Money

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Working with the Internal Revenue Service

Visit the Internal Revenue Service web site and get an EIN for the business. They’re free. Choose a business entity like corporation, LLC, etc.

A company may get started as a sole proprietor. But they absolutely need to switch to a form of corporation or an LLC.

This is to minimize risk. And it will make best use of tax benefits.

A business entity matters when it involves tax obligations and liability in case of litigation. A sole proprietorship means the owner is it when it comes to liability and taxes. No one else is responsible.

The best thing to do is to incorporate. You should only look at a DBA as an interim step on the way to incorporation.

Kicking Off the Business Credit Reporting Process

Start at the D&B web site and get a free D-U-N-S number. A D-U-N-S number is how D&B gets a company into their system, to produce a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s sites for the company. You can do this at If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process. 

In this way, Experian and Equifax have activity to report on.

Vendor Credit Tier

First you should build trade lines that report. This is also called the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score. 

And with an established business credit profile and score you can begin to get credit in the retail and cash credit tiers.

These varieties of accounts often tend to be for the things bought all the time, like marketing materials, shipping boxes, outdoor workwear, ink and toner, and office furniture.

But first off, what is trade credit? These trade lines are credit issuers who give you starter credit when you have none now. Terms are oftentimes Net 30, instead of revolving. 

Hence, if you get an approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, such as within 30 days on a Net 30 account.

You want 5 to 8 of these to move onto the next step, which is the retail credit tier. But you may need to apply more than one time to these vendors. So, this is to validate you are reliable and pay on time. Here are some stellar choices from us: 

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then move onto the retail credit tier. These are businesses which include Office Depot and Staples. 

Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the small business’s EIN on these credit applications.

One example is Lowe’s. They report to D&B, Equifax and Business Experian. They want to see a D-U-N-S and a PAYDEX score of 78 or more.

Fleet Credit Tier

Are there 8 to 10 accounts reporting? Then progress to the fleet credit tier. These are businesses like BP and Conoco. Use this credit to buy fuel, and to fix, and take care of vehicles. Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the company’s EIN.

One such example is Shell. They report to D&B and Business Experian. They want to see a PAYDEX Score of 78 or more and a 411 small business telephone listing. 

Shell might claim they want a certain amount of time in business or revenue. But if you already have enough vendor accounts, that won’t be necessary. And you can still get approval.

how to start a business with no money Credit Suite3 - How To Start A Business With No Money

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Cash Credit Tier

Have you been sensibly managing the credit you’ve up to this point? Then move to the cash credit tier. These are service providers like Visa and MasterCard. Just use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.

One example is the Fuelman MasterCard. They report to D&B and Equifax Business. They want to see a PAYDEX Score of 78 or more. And they also want you to have 10 trade lines reporting on your D&B report.

Plus, they want to see a $10,000 high credit limit reporting on your D&B report (other account reporting).

Plus, they want you to have an established small business.

These are companies like Walmart and Dell, and also Home Depot, BP, and Racetrac. These are usually MasterCard credit cards. If you have 14 trade accounts reporting, then these are feasible.

How to Start a Business With no Money: Take Care of Your Business and Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and attend to any errors as soon as possible. Get in the practice of taking a look at credit reports and digging into the particulars, and not just the scores.

We can help you monitor business credit at Experian and D&B for 90% less than it would cost you at the CRAs. See:

At Equifax, you can monitor your account at:

Update Your Data

Update the data if there are mistakes or the details is incomplete. At D&B, you can do this at: For Experian, go here: So, for Equifax, go here:

How to Start a Business With no Money: Fix Errors in Your Business Credit

So, what’s all this monitoring for? It’s to contest any mistakes in your records. Mistakes in your credit report(s) can be fixed. But the CRAs generally want you to dispute in a particular way.

Get your company’s PAYDEX report at: Get your company’s Experian report at: And get your Equifax business credit report at:


Disputing credit report mistakes generally means you mail a paper letter with copies of any evidence of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always send copies and keep the original copies.

Fixing credit report errors also means you specifically detail any charges you challenge. Make your dispute letter as understandable as possible. Be specific about the concerns with your report. Use certified mail to have proof that you mailed in your dispute.

Dispute your or your business’s Equifax report by following the directions here:

You can dispute inaccuracies on your or your company’s Experian report by following the directions here:

And D&B’s PAYDEX Customer Service telephone number is here:

A Word about Business Credit Building

Always use credit responsibly! Never borrow beyond what you can pay back. Keep an eye on balances and deadlines for payments. Paying in a timely manner and completely does more to raise business credit scores than almost anything else.

Growing business credit pays off. Excellent business credit scores help a small business get loans. Your lender knows the business can pay its financial obligations. They recognize the company is bona fide. 

The small business’s EIN links to high scores and loan providers won’t feel the need to ask for a personal guarantee.

how to start a business with no money Credit Suite3 - How To Start A Business With No Money

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

How to Start a Business With no Money: Takeaways

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

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