When does “no money down” actually mean “no money down”?
Four products fund startups without any cash down from the borrower:
Merchant cash advances (MCAs) — 100% of the lump sum is wired to you. No down payment. Repayment comes from future card sales.
Revenue-based financing — same structure as MCAs. Zero down. Repayment is a daily/weekly ACH from your bank account.
Business credit cards — no down payment to open. You pay back as you spend.
SBA microloans (up to $50K) — some intermediary lenders offer SBA-backed microloans with zero or low down payment for qualifying startups.
Equipment financing technically requires 0-10% down, with the equipment itself serving as the “down payment” on the lender’s books.
What qualifies as a startup for funding purposes?
Most lenders consider you a “startup” if you’ve been in business less than 2 years. The boundaries:
Under 6 months in business: Hardest tier. Options narrow to business credit cards, equipment financing (if collateral is strong), and SBA microloans through community lenders. Most MCA lenders won’t fund you.
6-12 months in business: Most MCA and revenue-based financing lenders open up. Equipment financing fully available. Starter MCAs of $10K-$50K are common, with renewal at better terms after 12 months.
12-24 months in business: Full product menu including term loans and lines of credit. Best rates and largest amounts unlock.
24+ months: SBA loans become realistic. You’re no longer a “startup” from a lender’s perspective.
What lenders actually look at for startup loans
Three things rank above credit score for startup funding:
1. Monthly bank deposits. $10K+ minimum, ideally $15K+. Consistency matters more than peak — lenders prefer six months at $15K over one month at $40K and five at $5K.
2. Time in business. The 6-month mark is the most important threshold in startup lending. Crossing it opens the door to nearly every MCA and revenue-based financing lender.
3. Personal credit (500+). Even startup lenders check personal credit because there’s no business credit history yet. 500+ unlocks MCAs and equipment financing. 600+ unlocks better rates and more products.
What they don’t require: a business plan, tax returns (for most products), collateral, or a down payment.
Personal guarantee on a startup loan
Nearly every startup loan requires a personal guarantee — the owner is personally liable if the business defaults. This is unavoidable for new businesses because there’s no operating history for the lender to underwrite. Once you build 2+ years of operating history and consistent revenue, some lenders offer reduced or limited personal guarantees.
The PG is not as scary as it sounds. With responsible repayment, the PG never gets invoked. The Broker Shop only works with lenders who offer reasonable PG terms — no overreaching personal asset claims.
How to fund a startup under 6 months
Three real options when you’re too new for most lenders:
1. Equipment financing. If your funding need is for specific equipment, the equipment serves as collateral and many lenders fund startups under 6 months. 24-72 hour funding.
2. Business credit cards. Open with a personal guarantee. Capital One Spark, Chase Ink, and Amex Business cards routinely approve startups with strong personal credit (650+). Use for everyday expenses.
3. SBA microloans. Apply through a community development lender (CDFI). Slower (4-8 weeks) but designed exactly for early-stage businesses. Up to $50K, often with business mentorship included.