A common idea is that ‘to make money, you need money.’ Does this apply to getting a business loan as well? Is it possible to qualify without having money in the bank? If you play your cards right, you can get the financing you need and protect your company’s finances at the same time.

Why Does This Situation Come Up?

Contrary to what you may think, the reason many companies need a business loan isn’t that they’re going broke. Often, the situation of needing capital happens to perfectly healthy companies. This issue is related to cash flow problems.

Small businesses can get into a situation where they’re making a lot of sales but not getting the working capital they need to keep the process going. This can happen when they offer customers more time to pay invoices than the terms provided by suppliers. The records show a lot of sales, but there aren’t enough actual funds to pay suppliers and purchase more inventory.

Another reason businesses may need to apply for a loan without funds in savings is because they’re startups. New companies often need financial assistance to afford things such as equipment and inventory while they find solid footing. Can new businesses qualify for a loan if they don’t even have a credit rating yet?

How Can You Qualify for Financing?

To get a business loan without a credit score or savings, you need to get creative. Traditional loans are probably going to be out of the question, at least in the short term. Alternative financing can provide several solutions, though.

Credit Cards

One option is getting a business credit card. Startups can often qualify for this option if the owner has a good personal credit history, which shows experience managing money.

Equipment Loans

Equipment financing is another great option for new and established companies alike. The reason this type of financing works is that it uses the equipment you need as collateral. This lowers the risk for the bank and helps you qualify. Be prepared to pay more in interest for 0% money down equipment loans, however.


Finally, you can use factoring to get a cash advance on unpaid bills. The costs can add up if you use it for long-term needs, but for short-term goals, this option can help you get funds right away that you can use for practically anything.

If possible, use these financing options to stabilize your cash flow. That way, you can qualify more easily for traditional loans down the road.