How to Start A Business: No Money and Bad Credit


Starting a business with no money is one thing, and having a bad credit score lands you in a bad state. Nothing hurts more than having no potential help to satisfy your heart’s desires.

However, like I usually say, there is always light at the end of the tunnels, and you can kickstart a business with no money as bad credit.

But first, let’s understand bad credit and how you can get yourself there.

What is bad credit?

Having bad credit is a situation where you have a credit score of less than 580. In this situation, most lenders would not like to associate themselves with you. And that’s why you may find it discouraging to get financial help to start a business.

You can get yourself with bad credit if you have been defaulting on loans or paying late. Then, when the lenders report negatively on any of the three credit bureaus, the result would be a bad credit score.

But don’t let that motivate your plan to start a business while you have no money. Today, I’m here to show you excellent ways that you can use to start a business with no cash and bad credit.

1.     Talk to your friends and relatives

Your closest people could be the best to help you start a business without capital. Some might be good enough to give you money without expecting it back. However, if you promise to return the money, ensure that you don’t disappoint them.

Remember that you should maintain good relations before and after borrowing. They are the closest people you have.

2.     Get angel investors

Angel investors are those individuals who fund your business start-up in exchange for a share of the profits you make.

You have to prove that the business is a good idea and that there is growth potential. However, if you are not ready to share your business with anyone, this plan might not be a good idea.

3.     If you have a tangible asset, get a loan

This way could be the easiest to get a reasonable amount of business funds. If you have assets like a car, land, or even a house, you can use them as security to get a loan from the bank.

However, you should be more careful because the lender will repossess your asset if you fail to pay the loan. So, be sure about the returns of the business that you are starting.

4.     Start small

There is always magic in starting small. You will always have the effort to grow your business bigger. Furthermore, you will not stress taking loans or asking for funding from friends and family.

If you plow back the profits into the business, it will grow after than you expected.

5.     Get a short-term loan

If you have nothing at all, you can take a short-term loan like a payday loan. However, it would help if you were more careful to ensure that you repay the loan at the agreed time.

The good thing with quick online payday loans is that the lenders do not conduct credit checks before approving your loan.

Some payday loan lenders can give you up to 2 months to repay the cash. Others will only grant you two weeks. Unfortunately, payday loans are costly in terms of interest rates. So if you are not ready to pay an APR of more than 400%, then this one is a bad idea.

6.     Government grants

Do you know that you can get free money from the government to start a business? Well, it’s possible. However, you will have to apply alongside your business plan and where you plan to start up the business.

However, the application process can take time, and there is no guarantee that they will approve your request. So if you need to start faster, this option could not fit you.

7.     Credit cards

You can get your business start-up funds from your credit card. But this option poses a significant threat due to the high-interest rates. On the other hand, you can get quick funding with credit cards. In addition, credit cards can still help you if you have a bad credit score.

Bottom line

It’s applicable to start a business with no money and bad credit. However, it would help if you focused on saving money and building your credit score. The sure way to start a business is when you have no debts with anyone. Then, at least if the company fails, no one would come hunting you day and night.


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