Business loan

How To Get A Cashless Business Loan – Forbes Advisor

Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors.

Starting a business can feel like a Catch-22. Indeed, in most industries, you cannot start operations without significant start-up capital. Unless generous investors back your business, you will need to take out a business loan, which generally requires your business meets minimum income requirements to qualify.

New businesses or budding business owners may find this hurdle to approval frustrating, but there are still options available for cashless business financing.

Finding the Best Small Business Loans of 2022

The Importance of Cash Flow to Business Lenders

Cash flow refers to the ratio of income and expenses of a business. A business can have positive cash flow, which means its overall revenue is greater than its expenses, or negative cash flow, which means its expenses are greater than its revenue.

Businesses with positive cash flow tend to be more reliable borrowers who can afford their debt obligations, which makes them a reputable candidate to lenders. However, if a business has negative cash flow or no money lenders are generally reluctant to provide financing. At the end of the day, lenders want to ensure that borrowers repay what they borrow without any hassle.

When you will need to get a cashless business loan

New businesses looking to take off and grow their business may be looking for financing that allows them to do so. For new business owners who do is have unsecured start-up funds, most likely they will have to rely on money they can borrow now and pay back later.

Depending on the lender and your future business projections, a business loan or business start-up loan may be a viable option, even if you have no money. This can help you avoid dipping into your personal savings to start your business. However, it is crucial to borrow funds that you know you can repay on time.

4 Funding Options for Cashless Businesses

Here are the top ways to get a business loan when you have little or no income.

1. Business Loans

Because many commercial lenders require potential borrowers to meet minimum annual income requirements to qualify for a loan, it is generally difficult to obtain a traditional commercial loan. However, some lenders happily offer small business loans to start-ups without current receipts.

In the case of new businesses and start-ups without proof of annual income, commercial lenders who deem these businesses eligible for application will likely require additional documentation. For example, startups are typically required to provide financial projections and a detailed business plan to illustrate the company’s ability to repay debt obligations.

2. Business Credit Cards

Business credit cards, much like credit cards, allow you to borrow up to a predetermined credit limit. You are expected to pay off your balance at the end of each month, and the outstanding balances will begin to accrue until the interest is fully paid off. This means you can avoid interest altogether if you pay off your balance in full each month.

Unlike business loans, credit card providers generally use your personal income and personal credit score for qualification, making them a viable option for businesses with little or no cash flow. This means that you won’t need to provide any business documents showing your monthly or annual income. Most business credit cards require a minimum personal credit score of 670. However, a higher score will yield the best terms.

Best Credit Card Deals 2022

Find the best business card for you and identify the factors that matter to your business

3. Equipment financing

Equipment financing allows you to finance the purchase of equipment necessary for your business activities. This can include everything from small items such as large electronics to manufacturing machinery. The piece of equipment you are financing serves as collateral—something of value that the lender can repossess to recoup losses—and secures the loan.

Because collateral reduces the risk you pose to lenders, equipment finance lenders may be more willing to approve new businesses or start-ups with little or no cash flow. However, just like business loans, businesses are generally required to provide financial projections and a detailed business plan that demonstrates the business can afford its debt securities.


Although a less traditional way to raise funds, crowdfunding has become a popular source of business financing. Here’s how it works: You choose a platform, like Kickstarter or Wefunder, and create a post describing your product or service. Then you choose a goal amount and create tiered rewards for contributors based on the size of their donations, such as early access to product, special features or merchandise.

The downside to crowdfunding is that you usually have to reach your fundraising goal to receive some money. If you miss the goal, most platforms will refund donors, and you get nothing. However, the advantage of crowdfunding is that the money you raise is purely donations, meaning you are not obligated to pay back to donors.

Crowdfunding is also cheaper than other forms of financing. Instead of paying interest to a bank, you pay a percentage of the amount you raise – usually ranging from 3% to 5%. If your campaign is not successful, charges are waived.

However, crowdfunding is not a guaranteed way to raise funds. Research shows that only 23.3% of all crowdfunding projects are successful. Technology, games and design projects are the most popular categories. If your business doesn’t fit into one of these categories, you may have less luck with crowdfunding.

Be aware of repayment obligations

Taking out a loan is easy, but paying it back is much more difficult, especially if you have little cash flow.

Before finalizing anything, assess your current and future cash flow to make sure you can afford the payments. Be realistic with your projections. If you miss a payment, it could hurt your credit and make it harder to qualify for other credit products in the future.

If you defaulted and personally guaranteed the loan, you will have to repay the money with personal funds like your checking or retirement account.

Should you get a cashless business loan?

Before taking out a business loan, run the numbers and see what you can afford to repay based on your current cash flow. Go through a worst case scenario and see if you would be able to afford the payments. If you can, then a business loan may be a wise choice. The last thing you want is to be stuck with a loan that you can’t afford to repay and the repercussions that come with it.