How To Start A Business With No Money - Bootstrapping Your Startup

How To Start A Business With No Money - Bootstrapping Your Startup
Amy Fontinelle
on March 18, 2020
Read in 8 min

Wondering how to start a business even though you don’t have a whole lot of money to work with?

Thanks to the wide range of financing options available to entrepreneurs, it’s now possible to start pursuing your dream even if you’re flat broke.

How To Start A Business When You’re Broke

Whether your idea is a new fitness wearable, a salon for special needs children, or an herbal tea farm, there’s a way to fund it.

With various business loans, crowdfunding, P2P lending, bartering and bootstrapping techniques at your fingertips, you don’t need fat savings account to start a small business.

1. Fund Your Startup with Small Business Loans or Credit Cards

There are many new high-tech options for borrowing money to fund a startup, but traditional loans and credit cards are still very effective.

Startup Loans and Lines of Credit

Conventional loans such as a business line of credit may be secured or unsecured. Terms depend in part on how the loan will be used.

Interest rates can be fixed or variable; minimum loan amounts apply.

SBA Loans

Some loans available from banks are guaranteed by the federal government’s Small Business Administration.

Small business owners can borrow up to $5.5 million, and there are special programs for entrepreneurs starting a business in disadvantaged communities.

SBA loans come in six types and cover a wide range of business purposes, from expanding an export business to financing real estate and machinery.

Online-only lenders make borrowing convenient.

Some also have unique underwriting standards, so you might qualify for an online loan even if you don’t qualify for a bank loan.

RELATED: SBA Loans – The Ultimate Guide to Government Lending

Equipment Financing

Equipment financing can also be a viable option if your business is dependent on equipment purchases.

Small Business Credit Cards

Credit cards can be one of the most expensive options for funding your business due to their open-ended repayment schedule and high-interest rates.

The average business credit card’s annual percentage rate is 15.37%, according to the personal finance website ValuePenguin.

Be sure to check out our list of the best business credit cards for options that will give you sign-up bonuses, 0% introductory APRs, and other desirable benefits.

RELATED: An Epic Guide to Business Credit Cards, Charge Cards, & Lines of Credit

2. Startup Funding via Peer-to-Peer Loans

One of the greatest innovations to come out of the fintech movement, peer-to-peer loans are typically funded by numerous investors who each contribute a small amount to a larger loan.

For example, if you borrow $25,000, your loan might be funded by 1,000 investors who each put up $25.

Plus, P2P loan companies streamline the whole process.

All you have to do is make monthly payments to the peer-to-peer lending platform, which then repays the investors’ principal, plus interest.

It all happens online.

Some peer-to-peer lenders only work with established small businesses, but here are options for brand-new ones:

Look for a P2P lender offering personal loans that you can then put toward your business.

3. How To Start A Business When You’re Broke – Try Crowdfunding

Crowdfunding is another modern marvel changing the face of small business lending as it lets anyone contribute any amount to your business.

Like P2P lending, crowdfunding takes place entirely online.

And the best part? You don’t even have to pay it back.

You will, however, lose some of your contributions to the crowdfunding company’s fees (typically 5%) and third-party payment processing fees (about 3-5%.)

With no prospect for your backers to receive anything (except for the swag promised for various contribution thresholds and the personal satisfaction they get from helping to fund someone’s dream) it’s imperative that you create an extremely compelling campaign.

If you’d like to give crowdfunding your business a shot, here are four options:

  1. Kickstarter funds ideas related to art, comics, crafts, dance, design, fashion, film and video, food, games, journalism, music, photography, publishing, technology, and theater. The catch is that if you don’t meet your entire fundraising goal in 30 days, you get nothing (but you don’t owe fees, either).
  2. Indigogo doesn’t limit you to all-or-nothing fundraising and helps fund a wide range of endeavors, from minimalist handbags to superfood snacks.
  3. GoFundMe helps startups from ice cream makers to image consultants. There are no fundraising deadlines and no penalties for missing your fundraising goal.
  4. Crowdfunder does not work with inception stage companies, but it does work with early-stage startups to help them raise money from a pool of venture capitalists and angel investors.

4. Bootstrap with Lean Startup Principles

“Lean startup” might sound like starting your business on the leanest budget possible, but that’s not entirely accurate.

While it’s not a method of funding your business per se, the lean startup process can limit how much funding you need in the startup phase and can get your business generating revenue faster.

The lean startup method involves creating a minimum viable product (MVP) and introducing it to prospective customers to get their feedback, then deciding whether to make modifications or scrap the idea altogether.

The idea is to fail quickly and validate the real market opportunity early on, rather than spending ages creating a business plan around your assumptions and bringing your idea to market after months or years– without knowing whether it will succeed!

Through several rounds of testing your idea with this process, you’ll finally have a product that serves the actual needs of your market.

It takes a lot less money to create an MVP suitable for gathering feedback versus launching a full-blown business blindly.

5. Don’t Forget About Bartering 

Trade with others who can provide things your company needs, like web design, blog posts, accounting, marketing, SEO advice, and administrative assistance, in exchange for providing them with your small business’s product or service.

If you can’t find people who need what your business sells, try a barter network to expand your options.

You may need to negotiate based on how each party values their services. Is one hour of accounting worth one blog post?

One party can include cash in the deal if necessary to even out discrepancies; maybe one hour of accounting is worth one blog post plus $20.

As with any business deal, you should document the final terms in writing.

You won’t be able to succeed on bartering alone— you’ll eventually need to generate cash.

But bartering can help you get started and can even be a way to fund certain ongoing expenses.

Be aware that the IRS considers the value of property or services you receive through barter to be taxable income.

You may be able to take a business expense tax deduction for the bartered goods or services you provide, but the rules are complicated and may require an accountant’s help to decipher.

How To Start A Business With No Money – It Can Be Done

A lack of money doesn’t have to stop you from starting your company.

The vibrant US economy offers many funding options to entrepreneurs, from peer-to-peer loans to bartering to bank loans.

Before you know it, you’ll have the satisfaction of starting your own business and controlling your financial future–

And that’s priceless.

What No One Will Tell You About Starting A Business

In some ways, building a business is a lot like raising a child.

Especially early on, your company needs everything from you, including a lot of late nights, endless patience, and yes, even love.

It’s more than a full-time job, but, like raising a child, building your own successful company has many rewards.

If you think being your own boss is going to give you more freedom than life as an employee, you’re right—

But this freedom comes with some caveats.

Here’s what no one will tell you about what it’s actually like to run a business:

Starting a business can be lonely.

The demands of running your own company can make socializing and spending time with friends and family difficult—

Especially if they don’t understand how much pressure you’re under.

“My social and family life was impacted tremendously as a result of starting a business,” says Shayrgo Barazi, founder of

“It’s a huge burden but one that I perceive as being temporary while I build up the processes necessary to remove myself from the daily tasks associated with running a business.”

Your relationships are going to change.

People are pack animals by nature, and when you become a successful entrepreneur, you are no longer part of the pack.

This can result in jealous friends and family members, dissolution of relationships as your priorities change and even a complete change in your outward identity.

“I could no longer relate to my old friends who still earned a paycheck and were happy at a job,” says Eva Spitzer, founder of Peony & Moss.

“I ended up starting a meetup for women entrepreneurs to make new friends.”

Being in charge of your own destiny is hard.

If you went to public school, you probably noticed that pretty much every facet of your education was preparing you to be a part of the workforce—

Not to be an entrepreneur.

Combine that with the fact that humans are naturally risk-adverse animals, and the pressure of being wholly responsible for your success or failure could be the most stressful challenge you’ll face in your entire life.

Success can actually be scarier than failure.

It’s easy to imagine the difficulties you’ll deal with should your company go belly-up and you have to file for bankruptcy, but few people are prepared for the overwhelm of striking proverbial oil and going big.

From the worldly temptations afforded by wealth to coming face-to-face with your mortal limits, success has the potential to reveal more about you than you might be comfortable with.

When you start a company, have a gameplan in case of failure

But be prepared to succeed big time as well. (It happens!)

You’re going to have to fire people.

“The people you start with are not always the ones who grow with you,” says Paige Arnof-Fenn, Founder & CEO of Mavens & Moguls.

“The biggest mistake and hardest lesson I learned when I started my company is not getting rid of weak people earlier than I did in the first few years of my business.

I spent more time managing them than finding new customers.

It would have been better for everyone to let them go as soon as the signs were there.”

It’s OK to ask for help.

It’s a well-known fact that 90% of businesses fail, and the reasons for this include everything from founder burnout to running out of cash.

Many of these things can be avoided simply by asking for the right kind of help.

If you want to avoid burnout, you’re going to have to learn to delegate, or at the very least, develop a solid support network.

You can even avoid becoming strapped for cash by bringing in investors or requesting a small business loan.

Praise and reassurance are rare.

When you’re running your own business, you don’t have a boss telling you when you’ve done a good job.

You don’t even get performance reviews.

You may get complaints from customers once in a while, but positive feedback is hard to come by.

Mostly it’s just you, your results, and how you feel about them.

So try not to be too hard on yourself!

There’s nothing like running your own business.

No matter what industry you’re in or what kind of business you own, you’re going to have regrets.

You’re going to have doubts, you’re going to have failures–

And you’re going to have growth.

“This has been the most rewarding journey of my life,” says Lori Cheek of her arduous work to build

“In the end, I’m going to have a magical story to tell.

My advice to other aspiring entrepreneurs is to be brave and follow your instincts.”

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Amy Fontinelle Finance Journalist

Amy Fontinelle is a writer, editor, and personal finance expert.

Her articles have appeared at Investopedia, Bankrate,, The Simple Dollar,, Yahoo,,, Bankaholic,, Saving Advice and other sites.

Amy’s clients include personal finance websites, financial institutions, public policy organizations, academic journals, and professional economists.

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