Should I Take Out A Loan To Do Affiliate Marketing?

I’ve been contacted by several blog readers recently who want to get started in online marketing who all had the same question.

“Should I take out a business loan or investment to start out in affiliate marketing?”

My short answer to them is normally just “NO!!” and then I’ll ask why they think they need a loan.

Today I’m going to share five reasons they gave as to why they think they need a loan and my response to each.

I Get It

Before we start, please know that I understand where you’re coming from.

You’re probably feeling impatient right now and want to make money as fast as possible.

You’ve probably heard some big numbers being thrown around and feel like you need the startup cash to compete.

Hell, maybe you want to take out a loan because “Hey, that’s what people do when they start a business”…

Whatever the case, you’ve got it a bit mixed up and I don’t want you to start out the wrong way.

So pay attention now and let’s talk about why you think you need loan.

1. I need a bankroll to test new

Yes, this is true. If you’re going to do paid traffic (you pay Adwords or Facebook for traffic) you’ll need some money to pay for the clicks.

But you don’t need $100,000…
or $50,000
or even $5000.

All you need is enough money to pay for a few tests per week.

It might surprise you, but most of the biggest media buyers in the game started with a few thousand dollars. Some started with as little as $100. That’s what is so beautiful about this industry.

You can start out spending $100/week on a campaign and grow it to spending $10,000/day in just a few months. That’s because of the power of The Affiliate Marking Money Wash.

Let’s say you have a bankroll of $350 to start with.

  • There are 7 days in the week, so you can spend $50/day.
  • Let’s say after some testing you get it to make back $60/day.
  • That’s $60 revenue per day with $10/day profit.
  • At the end of the week the affiliate network sends you a wire for $420.
  • Now you have $420 to work with.
  • So you raise your daily budget to $60/day. ($420/7 days in a week)

Each week the Money Wash will continue to grow your funds. You’ll also be optimizing your campaign for higher ROI all the time.

If things goes well, your bankroll will quickly grow large enough, that you’ll never need to consider a business loan again.

My guess is that if you’re considering taking on a $100k loan to get started, you’re being impatient. You want to start making $10,000/day profit by next week.

That is a setup for failure.

Be patient. Start small. Try to break even. Then try to make a small profit and let the Money Cycle do its job.

2. I need to build a team.

106506You don’t need a team.

One of the biggest misconceptions for new affiliates in 2015 is that they need a team to compete and make any money. This is not the case.

Almost every major affiliate and media buyer I know started off by themselves, in their living room, with a pretty small budget.

They worked this way for the first 1–5 years and made tremendous amounts of money.

Several years later, some of them built teams and are now doing even more volume and making more money… which is all great.

But it’s also causing a lot of confusion.

The problem is that new affiliates now think they need a team of 5–10 people to launch their first campaign. And instead of focusing on learning the basics they’re trying to learn how to hire people. And to pay those people they need a business loan.

This is a disaster waiting to happen.

If you’re new – building a team shouldn’t even be on your radar yet. Your goal is to take whatever small amount of money you have saved right now and see what you can do with it.

If you do really well and think you could do even better with a couple more people in the mix – THEN consider building your team.

But to take out a loan, then build a team and then try to learn how to do affiliate marketing is insane and a great way to end up broke and in need of debt management companies.

Start by yourself.
Start small.
If it blows up and you need help.
Then consider building a team.

3. I don’t have any other options for startup money.


Yes you do. Get a job and start saving your paychecks.

Remember, just because your dream is to work online doesn’t mean you have to make your initial test budget online.

Sure, I built part of my initial bankroll with money I made from some SEO sites, but the bulk of it came from my 9–5 job.

If you can’t find a way to make $1000 online to get started with, get a job in the real world. Do whatever you have to do for a month or two and save every dime.

Problem solved.

4. I’ll pay it back real fast.


No, you won’t.

You probably envision yourself turning that $10,000 or $50,000 loan into $100k in a month and paying it all back right?

That’s awesome.

But what happens if you lose all of the money?

Remember, there is no guarantee that you’ll make any money on your campaigns. Most people who try this thing fail.

If you fail with your own $1000 and lose it all, that’s going to suck.

But what if you lose $50,000 that you took on as a loan? Now you’re $50,000 in debt. The bank is going to charge your interest and/or the loan shark you borrowed it from is going to break your legs.

Either way – not a good idea my friend.

Don’t think that just because you have a lot of money to start with you’ll do better. That’s not how it works.

5. I don’t want to wait.


This is a bad sign.

Maybe you just want to “Get rich quick”. Maybe you’re behind on bills and think affiliate seo services that work is way to make some fast cash.

Either way,if you don’t have the patience to wait until you can build your own startup cash you’re probably not going to do very well at this thing.


Because it takes patience. And if you’re willing to go into the hole financially just so you can start “NOW” you’re probably not going to have the patience to make your campaigns work.

This isn’t a game you jump into head first and start making money right away.

Your first several months, or even years will be spent toiling away while you learn the basics and make mistakes.

Keep in mind:

  • I worked 10 hours a day for three months before I made my first sale for $28.
  • Then I spent two years doing SEO making a few grand a month at most.
  • Then, I learned about paid traffic and lost money every day for a month before I saw my first day of profit.

Don’t get caught up in the mentality that you’re going to somehow take a $50,000 loan and turn it into $1Million overnight.

That’s a sucker’s dream. And will leave you disappointed, upset and depressed.


Don’t take out a business loan or investment to start seo services that work long term for your affiliate marketing career. It’s too risky and really not necessary.

One of the best things about starting an online business, especially affiliate marketing is that you don’t need a lot of money to get started.

  • You don’t need business cards.
  • You don’t need an office.
  • You don’t need employees.
  • You don’t even need a product.

All you need is a little cash, imagination and patience.

I swear to you my friend.

That’s really all you need.

  • Rory Coyle

    More truth from Mr. Malan aka Yoda. Thanks again for Morning Coffee – it’s keeping me on point like nothing else has.

    • Malan Darras

      Yoda haha, I’m honored. I love that dude.

  • Vlad Molchanov

    What about investors and not a loan? (Caveat I’ve had campaigns hit 20K profit days before.) For example, if you had to start over TODAY and kept all your knowledge of how to run and optimize a successful campaign. Would you partner up with someone who would put up the money?

    • Vlad Molchanov

      But great post. Not disputing the advice.

    • Malan Darras

      I would not partner up with an investor today, Not ever. I’d start small and build it up.

      • Vlad Molchanov

        I guess sometimes good advice is like good medicine taste like shit but good for you. Thanks for this!

        • Fabio

          That’s Malan’s opinion though. What you choose to do is up to you.
          Realize that as an affiliate marketer, you essentially are a digital marketing firm. So wherever your cash may come from – whether savings, or investments – you need to understand the various intricacies entailed.

  • Will Oviedo

    Great post malan. I showed my friend a months ad spend of $XX,XXX a month and his first response was I don’t have $XX,XXX right now to spend.

    I told him that I honestly just spend $100 at a time and if I make back $110 I do it over and over again. Your absolutely right you don’t need a lot.

    • Malan Darras

      Morning Coffee FTW

  • Justin Garza

    I’ve actually given up on helping people – I now just send them straight to your blog. Thanks Malan for all you do.

    • Malan Darras

      thanks for the extra visits haha

  • Petri Jarvinen

    Sound advice, Dont´s will save us all alot of cash and headache so thank you very much! BR PJ

  • Aleksander Krotov

    Malan, I totally agree with you on this one. There is no point to take a loan. I’ve also started with about $1000 and now after few successful campaigns I have bigger budget to test new offers. It’s not fun to pay back the loan after you fail on some campaign and it’s much safer to risk with you own money. Thanks for the post and your morning coffee periscopes, I listen to them while I drive back home from my daytime job.

    • Malan Darras

      thanks Aleksander – i’ll see you on the next one

  • Chris

    Hey Malan,

    Great article!

    If you had $2,000 to start with right now what would you choose to do? I mean desktop, mobile? I have that budget available but I dont know where to start.


    • Fabio

      Hey Chris,

      It’s been said before that the best place for noobies to start is with mobile 🙂

    • Malan Darras

      what Fabio said.

  • Reid Yamamoto

    Great advice and I agree that it’s crazy to take out a loan to do affiliate marketing. There’s enough stress and pressure financially when things aren’t going well–even with your own money. Just like poker, start with what you can afford to lose and build your bankroll when you win.

    • Malan Darras

      right on Reid – who needs the extra pressure? life is weird enough as it is

  • Fabio

    Great post as always Malan. I love your down-to-earth, cut and dry approach. We don’t need fluff, and you do a tremendous job at hitting the bull’s eye of an issue.

    • Malan Darras

      thanks Fabio – why fluff? enough of that out there already.

  • Yi Recipes

    hi Malan,
    Great post as usual. Yesterday was my first payment day with the ad network Peerfly.

    You can look at it in the attachment. And partly i was able to do by reading your blog Malan.
    Before I tried having a site, and a small product, not that wasn’t my thing, but affiliate marketing is the thing for me. Thanks for this site and for advice direct to the point.
    I hope one day to come to L.A. and offer you a drink.
    Thanks again.


    • Malan Darras

      glad to hear it Antonio. you’re on your way.

  • Marco Polidori

    Great post Malan!

  • Kelli

    I’m not in affiliate marketing, but I wish I had read this a year ago!! It’s definitely applicable to any startup. I could have just stood over the toilet and flushed dollars for the last year… A LOT of dollars…. but I learned from my mistakes and the timing of your post is still perfect, as today I was poised to max out the last bit of credit I could for my business. I know better at this point, but I was still tempted 🙂

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  • John James Robbins

    Hello, great article, as usual, thanks!
    I am going to start this in a month or two after Christmas. I have been learning for about 6 months in the aff marketing world and about 2 of those have been CPA specifically, including a month on STM (where I learnt SO much)
    I am selling my car (I am a car guy, so major part of life) to fund my campaigns.
    I totally agree about getting rich slowly and properly BUT
    What about people who spy, steal your landers and then you are back to 0 revenue?
    The way I figured out this game is you test, split test, spend, test some more, get into profit – then you throw as much money as you can (before you hit the spend cap) to gain as much profit as you can because someone will spy and steal your landers and in maybe 7 days you no longer earn anything.
    Is this correct?
    Therefore it might be worth taking out that loan…