Starting a new business can be exciting but also challenging, especially when it comes to funding. Many entrepreneurs face a common hurdle: securing capital before generating any revenue. Without sales history, banks and traditional lenders often see startups as high risk, making it difficult to access finance.
Working with Johnson Reed can help new business owners identify funding options that do not rely on past revenue. In this guide, we explain how to get business loans for a new business with no revenue, explore alternative funding sources, and outline strategies to increase your chances of approval.
Understanding the options early allows founders to plan for growth, hire staff, and invest in equipment without relying solely on personal savings.
How to Get Business Loans for New Business with No Revenue
Business loans for startups require a different approach than loans for established companies. Lenders assess potential based on the business plan, projected cash flow, collateral, and founder experience rather than past revenue.
The key is to demonstrate that your business is viable. This can include market research, clear revenue projections, and a detailed business plan. A well prepared plan can convince lenders or investors that your business is likely to succeed despite having no income yet.
However, many “startup loans” in the real world are not traditional bank loans at all. In many cases, startup funding is arranged through equipment finance (leasing), where the finance is secured against the asset being purchased.
Alternative finance options are also available. Many lenders offer startup funding options that support new businesses without revenue history, including asset finance, unsecured business loans, and flexible lending products designed for early stage companies.
Key Factors Lenders Consider for Startup
When applying for business loans for new business, lenders typically evaluate:
- The founder’s experience and background
- Strength and clarity of the business plan
- Market demand for the product or service
- Collateral or personal guarantees
- Financial projections and planned use of funds
Addressing these factors in your application increases approval chances. Even without revenue, lenders want evidence of careful planning and realistic forecasts.
Types of Loans Available for Startups
Startups have several financing options beyond traditional bank loans. These include:
- Equipment leasing / asset finance, where the loan is tied to the equipment you’re buying
- Unsecured business loans that do not require property or existing revenue
- Asset backed loans for businesses purchasing vehicles, machinery, tools, or specialist equipment
Each option has its advantages and limitations. Some require personal guarantees, while others are faster to access but may carry higher interest rates.
For many new businesses, equipment finance is often the most accessible route, because the lender has more security and the asset itself supports the funding decision.
Business Loans for New Business: Strategies to Secure Funding
How to Get Business Loans with No Revenue
Securing business loans for new business with no revenue requires demonstrating your potential. Lenders look for confidence, preparation, and evidence that the business can generate income.
A detailed financial model, realistic expense planning, and clear marketing strategies can significantly improve your application. Including a plan for repayment shows lenders that funds will be used responsibly.
Working with professional advisors, like Johnson Reed, can help ensure your loan application is complete and persuasive. Many startups miss out on funding due to incomplete documentation or unclear business strategy.
Why Startup Funding Often Becomes Equipment Leasing
If your startup needs funding to get started, chances are you’re paying for equipment, such as:
- Gym, salon, or clinic equipment
- Machinery or tools
- Vehicles and vans
- IT hardware and tech systems
- Catering, hospitality, and coffee equipment
When the finance is linked directly to an asset, lenders may be more comfortable approving it, even if your business is new, because the asset can support the agreement.
This is why many businesses searching for “startup loans” actually end up using:
- Business equipment leasing
- Hire purchase
- Asset finance
It’s still a form of startup funding, but it’s typically easier to access than a standard business loan because the equipment helps reduce risk.
Unsecured Business Loans
For entrepreneurs who cannot offer collateral, unsecured business loans can be an alternative. Unsecured business loans allow startups to borrow without tying up property. This option tends to be faster than traditional bank applications, making it suitable for businesses that need capital quickly.
Unsecured lending can work well for early stage businesses, but lenders may place more emphasis on:
- personal credit history
- affordability checks
- realistic forecasts
- evidence of a stable plan to repay
Preparing a Convincing Business Plan
A strong business plan is critical when seeking loans without revenue. Lenders need:
- Market analysis and competitor research
- Marketing and sales strategies
- Projected income and expenditure
- Milestones for growth and repayment
A professional business plan, like a business plan template UK, demonstrates readiness and reduces lender concerns.
Additional Tips for Startups Seeking Loans
- Keep personal credit in good standing. Lenders often review founder credit history.
- Start with small loan amounts; proving repayment capability can lead to larger loans later.
- Use professional advice to structure loan applications and financial projections.
- Explore multiple lenders to compare interest rates and terms. Your broker (Johnson Reed) will do this for you.
These strategies improve chances of obtaining finance even with no revenue.
Closing Thoughts: Funding Your Startup Successfully
Understanding how to get business loans for new business with no revenue is crucial for founders who want to grow quickly and professionally. By preparing a clear business plan, considering alternative finance, and choosing the right funding route, new businesses can access the capital needed to start trading confidently.
Access to funding allows startups to hire staff, purchase equipment, and execute marketing strategies without relying solely on personal savings. Working with specialists like us ensures the right loan structure, better approval chances, and long term financial stability.
Careful planning, realistic financial forecasting, and the right funding approach can set your business on a path to success from day one.
FAQ: Business Loans for New Businesses with No Revenue
Can I get a business loan with no revenue?
Yes, by showing a strong business plan, projected cash flow, and repayment strategy. Many startups use alternative funding options such as equipment finance or unsecured loans when they have no revenue history.
What type of loans suit startups with no income?
Equipment leasing (asset finance) and unsecured business loans are common options for businesses without revenue history.
Do I need personal collateral for a startup loan?
Not always. Some lenders require personal guarantees, but equipment finance may rely more on the asset being funded rather than property collateral.
How much can I borrow for a new business?
Loan amounts vary by lender and finance type. Startups often access £5,000 to £25,000, with higher amounts possible through structured finance or asset-backed agreements.
How can I improve approval chances for a startup loan?
Provide a detailed business plan, realistic financial projections, a clear repayment plan, and evidence of industry experience or market demand. If you are funding equipment, asset finance can also improve the likelihood of approval.
