Can anyone recommend websites or organizations that would give loans to pre-revenue startups or to founders who don't currently have income?
No bank is going to give a loan to the corporation where they will only get repaid if it someday makes a profit.
But, contrary to all the no-debt advice, isn't that the situation created by almost all SBA loans? The owners are always liable if the company can't repay the loan.
It's also not easy to get equity investments for a pre-revenue company, as was asked. Probably impossible except for friends and family.
So I think the only realistic choices are debt financing, if you have assets the bank will accept for your personal signature.
Many, perhaps most business start with more than one partner, so the "founder" has given up equity. But this usually provides help not money.
Brandon, I totally disagree with many of the responses posted here. I've started several companies and I took on personal debt every single time. But like you're thinking, I always kept the amount within a range that I thought I could pay back if my latest entrepreneurial dream fell through.
Contrary to popular opinion, BANKS and CREDIT UNIONS do lend money to entrepreneurs. Monitor your credit score and get to know the president or vice presidents of your local independent bank or credit union. Believe it or not, they will lend money if you have a good credit score and they believe in you and your idea. They won't lend you millions, but they will lend $5k to $40k or more. Especially if you use the money to buy things - things that they can consider collateral.
When I needed to use the money to pay people or buy advertising they often helped me 'discover' collateral I didn't even know I had - like sports card or coin collections, or equity in a used car. But there have been a handful of times when I had no collateral and I was able to get signature loans. Signature loans will have a slightly higher interest rate (around 7% these days) than a collateralized loan.
And I have borrowed money using the equity in my house several times. Almost every business owner I know has done it. Just be careful not to put yourself out too far on a limb.
One other thing... offer to take the bank president or VP out to lunch. Even if you don't get the loan the guy will probably give you a fortune worth of free advice. I feel like I've received a free MBA by offering to buy lunches for people like this.
Debt can either be on the company or on an individual.
The company by definition has limited liability. If things go down the drain the banks money is lost. (thus why they are nervous about lending large amounts to start ups)
The individual(s) can and often do take out personal loans. The problem is startups are risky and often require a lot of Capitol. Large personal loans can easily bankrupt someone. It seems silly to risk your whole future on one venture. Personal debt is fine but only to a level you can repay. A company often needs much more than that to get off the ground.
Equity funding is much better value for everyone involved. For the individual they give away some of their equity when they company is worth very little. For the investor the right opitunity can give about 400% return on investment. (would anyone actually agree to a 400% interest loan?!)