Getting an emergency business loan with no revenue can be a tall order.
Lenders who provide such loans are as rare as rain in the desert. The reason is simple: Lenders are thinking…if a business doesn’t generate revenue now, what proof can the company show that it will eventually veer into profitability?
If cash is tight right now, and you need a business loan real fast to turn things around, this article is for you.
It gives you the formula you need to get funds as soon as possible.
To get an emergency business loan with no revenue:
1. Make Sure You Have a Decent Personal Credit Score
2. Estimate How Much Your Business Needs
3. Clarify What You Need the Funds For
4. Find Lenders Who Provide Emergency Loans
5. Prepare Complete and Accurate Financial Statements
6. Write a Business Plan
7. Find an Emergency Business Loan That Works for You
8. Understand the Loan’s Requirements
9. Have a Repayment Plan
10. Gather the Required Loan Paperwork and Apply for the Loan
Ready? Let’s kick things off!
1. Make Sure You Have a Decent Personal Credit Score
To get an emergency business loan with no revenue, make sure you have a decent credit score.
You might ask, “What is a decent credit score?”
Well, anything above 600 is a good start. Some lenders want you to have 650 at a minimum—but with 600, you’re good to go with most lenders.
To keep a reasonable credit score, check it at AnnualCreditReport.com or via free credit score providers such as Credit Karma, NerdWallet and WalletHub.
Chances are that your current credit card issuer also gives you access to your scores for free—so avail yourself of these opportunities.
The bottom line is, you want to make sure you know your credit score and fix whatever problems there are on your credit report—inaccuracies and derogatory items, among other things.
2. Estimate How Much Your Business Needs
To successfully apply for an emergency business loan with no income, estimate how much your company needs.
Three important things here: how much you need, what you need it for, and how you’re going to use the loan proceeds to grow your company.
To find out how much you need, think about what you’re using the money for.
Nothing complicated here: Just evaluate your financing needs and maybe add a 10-20% “safety cushion” on top.
For example, if you calculate that you need $50,000 for payroll, inventory, marketing and vehicle leasing, add a 20% safety cushion ($50,000 x 20% = $10,000). That way, you apply for $60,000 ($50,000 + $10,000) and have enough wiggle room in case you end up needing more cash than initially planned.
>>>MORE: What is Business Financing?
3. Clarify What You Need the Funds For
To get approved for an emergency business loan while your company generates no revenue, be clear on what you need the cash for.
That’s important because you definitely don’t want to be as aimless as the wind, do you?
Are the loan proceeds for business expansion, working capital or something else? Answer that.
Create a budget so you know how to allocate the cash once the lender approves your application.
Lenders love it when they see that you will primarily use the loan proceeds for business-related activities such as sales growth or geographical expansion.
4. Find Lenders who Provide Emergency Loans
To get an emergency business loan with no revenue, find lenders who provide such loans.
See if online lenders and alternative lenders can approve your application. Try your bank or credit union…who knows?
Maybe your current financial institution will approve your application if you have a longstanding, positive relationship with the company.
When you find a lender whose business loan you think you can qualify for, perform due diligence. Check out the lender’s website and online reviews on reputable sites like TrustPilot and Better Business Bureau.
Give them a call also to make sure this is no dodgy or scammy operation.
5. Prepare Complete and Accurate Financial Statements
To get an emergency business loan with no income, prepare complete and accurate financial statements.
Do it yourself if you know a thing or two about business financial reporting.
Otherwise, outsource the whole thing to a local CPA or find a professional on sites like Upwork, Fiverr or Freelancer.
You can use accounting software like QuickBooks, Wave or Xero if your business operations aren’t that complicated.
Whatever way you choose, make sure you have a balance sheet, statement of income, cash flow statement and statement of owner’s equity—and have accurate, updated data on those reports.
6. Write a Business Plan
To find a no-revenue emergency business loan that approves you, write a compelling business plan.
A business plan isn’t just for the lender—although this document counts a lot…literally.
A business plan is also for YOU—the business owner—because it helps you chart an operational path you can follow to run a successful company.
Make sure the business plan is captivating, though. You don’t want to bore the lender with unclear, fuzzy and incomplete data.
The advice for a business plan is the same as the guidance for financial statements: Do it yourself if you know what you’re doing—or outsource the whole thing to freelancers online or professionals locally.
Alternatively, use business plan software like LivePlan, Enloop, GrowThink or BizPlan.
7. Find an Emergency Business Loan That Works for You
To find an emergency business loan with no revenue, zero in on financing that suits your business.
What does that even mean?
Well, for starters, you want a business loan that fits the kind of operation you’re trying to finance. Are you looking for a short-term business loan, business line of credit, invoice financing arrangement or merchant cash advance?
Second, what loan maturity do you want? 1, 3 or 5 years—or more?
Third, what extra conditions—personal guarantee and daily/weekly repayment schedule, for example—are you comfortable with?
Last but not the last, what interest rate can you cope with? This is important because the last thing you want is to deal with prohibitively high usury rates on your business loan.
8. Understand the Loan’s Requirements
To get an emergency business loan with no revenue, understand the loan’s requirements.
Different lenders have different loan requirements, but overall some conditions are always present when it comes to business loan underwriting.
Things like personal and business credit scores, annual revenue, years in business, business industry and size, business plan and business loan proposal are generally mandatory. Same thing for collateral or personal guarantee, and business and financial documentation.
You may not meet all requirements, but make sure you fulfill as many conditions as possible.
9. Have a Repayment Plan
To secure an emergency business loan with no income, create a repayment you can adhere to.
Make sure you understand the standard payment rate vs. a higher amount so you know how long your plan will take and how much interest you will pay.
To decide on the best strategy, use a payment calculator on your lender’s website or on financial platforms like Bankrate and NerdWallet.
Dedicate a separate business account—checking or savings, doesn’t really matter—from which you make monthly loan payments.
Be careful about the loan maturity you agree to—as things like inflation, the ups and downs of the economy, social upheavals, etc. can affect your business’s cash inflows and repayment ability.
Keep track of loan deadlines to avoid late payment fees from the lender and non-sufficient-funds fees from your bank.
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10. Gather the Required Loan Paperwork and Apply
To get an emergency business loan with no revenue, gather the required loan paperwork and then apply.
Although business loan paperwork may vary by lender, some documents always are quintessential when it comes to loan application.
Critical documentation includes your credit reports (personal and business, if applicable), bank statements and tax returns (both personal and business).
Lenders also want to see your business’s income statement, balance sheet, budget and future cash flow projections.
If any of these reports sound like a foreign language, it’s a sign you should outsource the whole thing and have professionals prepare that paperwork on your behalf.
Recap
Getting an emergency business loan with no revenue isn’t difficult if you do it right. Be sure you have a decent personal credit score and estimate how much your business needs.
Make clear what you need the funds for and find lenders who provide such funds.
Prepare complete and accurate financial statements, and write a compelling business plan.
Zero in on financing that suits your business and understand the loan’s requirements.
Finally, create a repayment plan you can adhere to, gather the required loan paperwork and then apply.
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