Starting out with nothing

When it comes to starting a business, it is often said that the initial idea is the most important element. While this is true to a certain extent, when it comes down to the crunch even the best idea in the world cannot go anywhere without the cold hard cash to back it up! So exactly how can you get your business started when you have no money and no credit?


Try to Build or Repair Credit

If you are considering a start-up, then at the very earliest opportunity you need to take some steps to repair or build your credit history. This means ensuring that you are meeting all of your financial commitments including paying your utility bills on time every month, keeping up to date with your taxes and also making sure that you do not default on any payments including rent, a mortgage, car payments and credit card payments.

If you are lucky enough to have friends or family members who are in a position to loan you the money, then it is wise to consider asking them for help. If they are willing to pay off a debt for you then it will make a great impact on your credit history since the loan will appear to have been paid off in full. However, be sure to maintain your repayments as nothing can sour a friendship faster than not returning money owed!

Choosing a business with low investment

If you do not have the time or the means to fix your credit rating first, then the next best option is to start a business which requires very little in the way of capital investment. This is only really going to be an option if you have not yet decided what sort of business you want to get into, or if your idea happens to be a low investment one anyway. However, you might be encouraged to look at your business plan and see where you can shave off some expenses.


Some of the areas where you may be able to make a saving include office space and staffing. Do you really need your own office to begin with or could you work from home or hire a desk in a shared office space. Similarly, you may find that you do not need to hire staff immediately and instead you can complete all of the work yourself thus reducing your outgoings.

You may also be able to reduce your outlay costs by looking for better deals on equipment and materials. The less you need to get you started the lower your initial investment needs to be. So why not start out small and work towards something bigger over time. There is no need to jump in at the deep end!

Consider applying for funding

There are lots of non-profit organizations and government schemes which are designed to assist entrepreneurs in getting a business started. They do this in a variety of ways including offering micro-loans, grants and even free access to certain resources. It can be difficult to find the right program and the application process can be complex, but let’s be honest – if you are not willing to put in a bit of effort you are not likely to succeed as a business owner and you need to ask yourself if this is right for you?

You could also look into securing an ‘angel investor’. This is a more experienced (and usually wealthy) entrepreneur who is willing to offer a new start up not only some valuable advice, but also some capital either in the form of a loan or by purchasing a percentage of the business.

Borrowing what You need

If none of these options is attractive to you or if you have tried and failed to get anywhere with them, then it may be the case that you have to borrow the money that you need. With smaller amounts a credit card might be the answer, but otherwise you will need to look at taking out a small business loan.

This can be a daunting prospect, especially if you have a bad credit rating. However, the good news is that there are lenders out there who specialize in authorizing bad credit loans. Although you may not be able to find such favorable interest rates, by shopping around you will still b able to get a fair and reasonable deal. You will need to choose between a secured or an unsecured loan, and it is important to weigh up the pros and cons of each. A secured loan may offer a better rate of interest, but if you cannot maintain the repayment schedule then you may lose the property that it is secured against. This is why an unsecured loan is often the smarter choice even if it is a little bit more expensive.

Starting a business is about hard work, passion and integrity. If you are determined and willing to put everything you have behind your idea then having bad credit will not deter you from succeeding. Credit scores can be repaired and funding can be secured if only you are willing to work for it.