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Virginia Small Business Loans: Best Online and Local Options

The state of Virginia earns top rankings in terms of business growth due to its well-educated workforce, world-class universities, and low level of business regulation. This article reviews the top options for Virginia small business loans and grants to consider for your small business.

Best Virginia Small Business Loans
Tetiana Sitiugina-Babiuk
Financial Sector Specialist and Content Strategist

Reviewed by: Sarah Brooks, Personal Finance Writer and Editor

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Virginia is home to nearly 800,000 small businesses, which is 99.5% of all Virginia businesses. Small businesses in Virginia employ 1.6 million people and make up almost half of the Virginia workforce. If you currently own and operate your own small business and are in need of extra funds, a small business loan or grant can help.

Small business loans can be used to grow or expand your business, pay employee salaries, purchase new equipment or inventory, make up for gaps in revenue during slow seasons, and more. Small business loans and grants in Virginia can also help with new companies and startups. Here, we’re discussing top options for both small business loans and grants in Virginia.

Top 6 Local Small Business Loans in Virginia

In the state of Virginia, the majority of the best options for small business funding are offered directly by state entities. As such, below are the best ways for obtaining a small business loan in Virginia:

1. Virginia SSBCI Cash Collateral Program

Usually, banks expect one to put up collateral to cover most or all of the total loan amount that they provide. However, this is often not possible for some small businesses that are low on assets. Luckily, the State Small Business Credit Initiative (SSBCI) Cash Collateral Program can be useful if such a situation arises.

The Cash Collateral Program is offered directly by VSBFA (Virginia Small Business Financing Authority), a government entity responsible for economic and business development. If you are applying for a loan from a participating bank that requires more collateral than you can possibly provide, the program will compensate you for the shortfall. As such, SSBCI will provide up to 40% of the initial loan amount, no more than $500,000.

This collateral support is available for the initial three years for a line of credit and for the first five years for a term loan. To take advantage of the program, you will need to approach a participating bank, which will contact VSBFA on your behalf, should additional cash collateral be required.

2. Virginia Economic Development Loan Fund

EDLF (Virginia Economic Development Loan Fund), presents a state-funded loan program available to small business owners, with funding coming directly from the VSBFA. These loans serve to compensate for any financing still missing after a SB has already received a bank loan. As such, the SB owner will end up having two separate loans: one from his or her bank, and another one from VSBFA.

The loan amount offered by EDLF starts at $50,000, and the maximum repayment period available is 10 years. In addition, VSBFA requires personal guarantees from those whose stake in the business is 20% or more, and places a UCC lien on its assets.

To get started, you need to contact VSBFA and find a participating bank lender. In order to be eligible for funding, you should meet the following requirements:

  • Conduct business in Virginia currently or be relocating to Virginia in the future
  • Create or retain jobs in the state of Virginia
  • Have fewer than 250 employees, no more than $10 million in annual revenues, and a net worth less or equal to $2 million
  • Provide own contribution of no less than 10%
  • Be in good standing with the State Corporation Commission and other state licensing authorities

3. Atlantic Union Bank

Atlantic Union Bank presents another option for receiving a small business loan in Virginia. With headquarters located in Richmond, the bank provides Small Business Administration (SBA) guaranteed loans. These loans offer more extended repayment periods, lower interest rates, and other attractive characteristics for assisting small businesses.

In addition to SBA loans, Atlantic Union Bank also offers installment loans, lines of credit, equipment financing, commercial real estate loans, and business credit cards.

If you are struggling to receive financing due to a lack of good track record or credit card history, find an Atlantic Union Bank branch in your area and apply for a loan. If you qualify, you will receive some of the lowest interest rates available on the market today.

4. Virginia SWaM Business Microloan Fund

The Virginia SWaM (Women-owned, and Minority-owned”) Business Microloan Fund is run by VSBFA with the purpose to provide SB owners with smaller loans than a bank would typically entertain. As such, the Fund does not require the participation of a bank lender.

The maximum amount for SWaM microloans is $25,000, and the repayment term is up to four years. A business may use these loans for renovations, working capital, or financing of machinery and equipment. However, the loans can’t be used for construction, refinancing existing debt, or financing real estate that is not occupied by its owner.

To apply, fill out the SWaM Microloan application. To be eligible for a SWaM loan, you should:

  • Conduct business in Virginia
  • Have been operating for at least two years
  • Have fewer than 250 employees, no more than $10 million in annual revenues, and a net worth less or equal to $2 million
  • Be in good standing with the State Corporation Commission and other state licensing authorities

5. Virginia Credit Union

If you are looking for lower interest rates, but have no luck with local banks, it may be time to consider using a credit union - a membership-based nonprofit or cooperative organization.

Generally, credit unions are willing to take on more risk than banks and are able to offer lower interest rates on loans. Virginia Credit Union is among the largest in the state and welcomes anyone who lives and works in Richmond or other cities in Virginia.

To apply for a small business loan with Virginia Credit Union, you will need to first determine whether you qualify for membership in the union. If you do, you will be able to apply for term loans, commercial mortgages, lines of credit, equipment loans, and business credit cards. Both variable and fixed interest rates are available.

6. Virginia Community Capital

Virginia Community Capital (VCC) is a non-profit community development financial institution (CDFI), providing free advisory services and financing to small business owners in the state of Virginia.

Among their numerous loan products ranging from $50,000 to $5 million, are equipment loans, business acquisition loans, lines of credit, commercial real estate loans, debt finance loans, and SBA loans. As a non-profit organization, VCC can take on more risk as compared to a regular bank, so they don’t have a specific requirement for a minimum credit score.

However, VCC does ask for various supporting documentation when assessing your application for financing. Some of the required documents include financial projections, a business plan, tax returns, and financial statements. To start an application, complete VCC’s online small business loan questionnaire.

A VCC staff member will then reach out to you and explain the requirements for supporting documentation. The complete process usually takes 45 days from submitting a full loan application until the loan pays out.

Top 4 Online Virginia Small Business Loan Options

In addition to applying for a traditional loan, you might also consider an online small business loan. These are available nationwide, along with other local financing alternatives. Funding is typically much quicker with online loans than other types of financing, making them a good alternative for small businesses in need of cash now. Below are some of the top online options for small businesses in Virginia:

1. Kabbage - Best for Fair Monthly Profits

Kabbage is backed by American Express and offers small businesses lines of credit from $2,000 to $250,000. To apply, you simply fill out the application and connect your business bank accounts. A Kabbage representative will look into your accounts in real-time and give you a funding decision as soon as possible. Kabbage charges straightforward, monthly fees on just the amount that you use, and there are no prepayment penalties.

Pros
Straightforward application process
Decision made in real-time
No prepayment penalties
Monthly repayment schedule
Cons
Fee structure can be confusing
Personal guarantee required

For each line of credit draw, you’ll choose a repayment term of six, 12, or 18 months. For six-month terms, rates are 2-9%. For 12-month terms, rates are 7.5-18%. For 18-month terms, rates are 15.75-27%. Collateral is not required, but you will need to sign a personal guarantee in order to get approved.

To qualify, Kabbage wants to see a minimum credit score of 640, one year in business, and $3,000 per month in revenue. The fair monthly revenue requirement is what makes Kabbage stand out among the rest.

The Bottom Line

Most online lenders require a monthly revenue of at least $10,000. Kabbage requires just $3,000, making them our top pick for small businesses with fair monthly profits. If you’re in need of funding to either grow your business or cover expenses during a slow season, a Kabbage line of credit could be a good fit.

Try Kabbage

2. Fundbox - Best for Fast Funding

Fundbox

Fundbox is an online fintech company offering business loans and lines of credit up to $150,000. Fundbox has been in business since 2013 and has funded over $3 billion in capital. The application is quick and easy, and you can receive a decision in as little as three minutes. If approved for a loan or line of credit, Fundbox can distribute your funds to you as soon as the next business day.

Pros
Easy application
Fast decision and funding time
Low credit accepted
No additional fees
Cons
Small credit limit
Interest rates can be high

Fundbox loans and lines of credit are available to borrowers up to $150,000. Loans are given as one lump sum, with a term length of 24 or 52 weeks. Rates start at 8.33% for 24 week terms. Lines of credit are a revolving loan, meaning you can use the funds, pay them back, and use them again. The term length for each draw is 12 or 24 weeks, and rates start at 4.66% for 12 week terms. Payments for both loans and lines of credit are made weekly.

To qualify for a loan or line of credit from Fundbox, you’ll need to have been in business for six months, have $100,000 in annual revenue, and have a minimum credit score of 600.

The Bottom Line

If your Virginia small business is in need of fast funding, Fundbox is worth looking into. Rates are competitive for online lenders, and funding decisions are made within minutes.

Try FundBox

3. Bluevine - Best for Line of Credit

BlueVine

Bluevine is an online alternative to banks and credit unions, offering borrowers lines of credit up to $250,000. Backed by the FDIC, a Bluevine line of credit can be used to purchase inventory, fund a renovation, refinance existing debt, or pay for everyday expenses.

With a line of credit, you use the funds, pay them back, and are able to use them again. You only pay interest on the funds that you use. The application is easy, and you’ll receive a funding decision in as little as five minutes.

Pros
Streamlined application
Fast decision and funding time
Competitive interest rates
Excellent customer service
Cons
Not available in every state
Only business-to-business companies will qualify

Bluevine offers lines of credit ranging from $5,000 to $250,000 with rates starting at just 4.8%. Terms are six or 12 months with each draw, and repayments are made weekly or monthly. There are no prepayment penalties, and since interest is calculated daily, you actually save money by paying early.

To qualify, you’ll need to have a minimum credit score of 625, be in business for six months, and have $10,000 per month in revenue. To apply, you’ll be asked basic questions about your business, and you’ll need to provide a bank connection or bank statements for the past three months.

The Bottom Line

Bluevine is our top pick for small business lines of credit. The application is easy, decision and funding times are quick, and rates are competitive. If you need access to capital quickly and prefer a revolving line over a traditional loan, Bluevine is worth looking into.

Try BluevIne

4. Fora Financial - Best for Merchant Cash Advances

Fora Financial

Fora Financial has quickly become a reputable fintech lender offering easy access to funding for thousands of small business owners. The online company offers short-term loans and merchant cash advances ranging between $5,000 and $750,000. They are ideal for businesses operating in a range of industries, from construction to hospitality.

By working with Fora Financial, you will enjoy both speed and flexibility. After you submit your one-page online application along with the supporting documentation, you can expect to hear back about the decision within 24 hours. Should you get approved, you will see the funds in your bank account in approximately three days.

Pros
High borrowing limits
Early repayment discounts
No collateral required
Applying will not affect credit
Cons
Short repayment terms for loans
Fees not disclosed

A merchant cash advance is ideal for small businesses looking to cover short-term expenses. Rather than making fixed monthly payments, you’ll pay back the loan based on your credit and debit card sales. This is often a less stressful form of borrowing, because if business is slow, your payments will naturally be less. Collateral is not required, and Fora Financial does offer early payoff discounts.

Fora Financial looks at more than just your credit score when deciding whether or not to approve your loan. To qualify for a merchant cash advance, you need to be in business for at least six months and have $5,000 per month in credit card sales. For a short-term loan, your minimum monthly revenue must be $12,000. The minimum credit score for both is just 500.

The Bottom Line

Merchant cash advances are useful for businesses with inconsistent revenue in need of cash. They can help bridge the gap when sales are down, allowing you to continue to pay employees, purchase merchandise, or cover an unexpected expense. Fora Financial offers merchant cash advances with high borrowing limits and low credit score requirements, making them our top pick for Virginia small businesses.

Additional Virginia Small Business Financial Resources

Small business loans are a great way of securing much-needed funds, but they come at a cost. Before considering getting a loan, make sure to take a look at several small business grants for which you might qualify. While these grants might be time-consuming and competitive, securing one will provide your business with some free money.

Below are the top small business grants available in Virginia:

1. Virginia Economic Development Incentive Grant

The Virginia Economic Development Incentive Grant program (VEDIG) was established to encourage and assist companies in locating important headquarters, service, or administrative sector operations in the state of Virginia.

By doing so, the program aims to create additional employment opportunities. However, it comes with serious competition between Virginia and another country or state for attracting the project. The size of the grant varies depending on the wage levels, the number of jobs created, and the state’s return-on-investment.

2. Virginia Small Business Jobs Grant

Businesses working in the fields of research and development, manufacturing, B2B information technology, distribution centers, and inbound call centers can apply for the Virginia Small Business Jobs Grant from VSBFA. To apply, you must have a maximum of 50 employees, have an average annual revenue below $3 million, and create five or more new full-time job positions in Virginia.

3. Virginia Investment Performance Grant

The Virginia Investment Performance (VIP) Grant was created to support research and development companies, as well as manufacturers. To qualify for the grant, you must have created new technology or leveraged the existing one in order to improve productivity or operations.

Eligibility also depends on capital investment in property, so it is optimal for medium-sized businesses. If you win the grant, the exact amount will be determined by the state Secretary of Commerce and Trade.

How to Prepare for a Virginia Small Business Loan

Before applying for a small business loan in Virginia, make sure to focus on the following preparation steps:

1. Improve Your Credit Score

Most lenders will consider your personal credit score when reviewing the financing application. To give your credit score a boost, make sure to catch up on any past-due accounts and not miss any payments in the future. Even if you are not behind on your bills, having high balances on your credit cards or lines of credit can hurt your credit score, so make sure to pay them down and maintain a low balance relative to your credit limit.

2. Register Your Business

No matter what type of business structure you follow, there are some common steps for registering a business in Virginia:

  • Come up with a business name
  • Select a registered agent, or an entity that accepts tax and other legal documents on behalf of your business
  • Get an Employer Identification Number (EIN) that is assigned by the Internal Revenue Service to identify your business for tax purposes
  • File formation documents

3. Prepare a Business Plan

A good business plan will help you through starting and managing your business, and it will also be required for most loan applications. In your business plan, you can include information like your company description, overall market analysis, the organization and management of your company, your sales and marketing plan, and more.

4. Strengthen Business Revenues

Creating and following a thorough business plan will help you to grow business revenues over time. Generally, there are four ways to take your revenues to the next level:

  • Increase the number of customers
  • Increase the frequency of transactions per customer
  • Increase the average transaction size
  • Raise your prices

5. Open a Business Bank Account

Finally, you will need to open a business bank account, where the lender can deposit their funds. In addition, a dedicated bank account will help you to track your business finances more efficiently and promote better bookkeeping practices.

Final Words

Without a doubt, Virginia presents one of the best states for starting and growing a business. It offers numerous assistance and funding options aimed at supporting small business operations. In addition to various lenders offering small business loans in Virginia of all types, online applications are available 24/7, and qualification requirements are often simple and straightforward. If you are a small business owner in the state of Virginia, there should be nothing holding you back from applying for a loan or grant.

Tetiana Sitiugina-Babiuk

Written by: Tetiana Sitiugina-Babiuk

Financial Sector Specialist and Content Strategist

Independent writer, content strategist, and financial sector specialist. Tatiana has an extensive experience in working with financial institutions such as Bank of Canada and Risk Management unit at FinDev Canada. She holds an MA in Financial Risk Management from the University of Toronto.

More about me
Sarah Brooks Personal Finance Writer and Editor

Reviewed by: Sarah Brooks

Personal Finance Writer and Editor

Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.

More about me

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