Guide to Small Business Loans & Funding in Virginia

Guide to Small Business Loans & Funding in Virginia

Reading Time: 7 minutes(Last Updated On: December 22, 2019)


There’s nothing quite like Southern hospitality.


While that statement usually refers to fresh lemonade and a rocking chair on a front porch, there’s another form of Southern hospitality you may not be so familiar with.


Here, we’ll give you everything you need to know about business loans in Virginia.


Let’s get to it y’all!


Starting & operating a business in Virginia


Ranked #1 on CNBC’s 2019 list of America’s Top States for Business, Virginia generated nearly $552 billion in GDP in Q2 of 2019 – amounting to roughly 2.6% of the total U.S. GDP.


Not impressed? Then consider the fact that Virginia, which is less than half the size of Colorado, generates twice as much in GDP.


Quite the eye-opener, we know! But what is it that makes Virginia’s economy so strong?


There are a number of reasons why Virginia is such a great place for you to start a small business, including:


  • The 5th lowest unemployment insurance taxes in the country – 43% lower than the nationwide average
  • A corporate income tax rate of 6% which has remained stable for nearly 50 years
  • Building costs that are between 7-19% lower than the national average
  • An overall economic growth rate of 1.9% – just under the national average (but higher than most surrounding states)
  • Minimal union presence, with only 5.5% of employees having union membership
  • Being a right-to-work state, meaning unions and employers are banned from creating contracts obligating employees to pay the cost of union representation
  • An unemployment rate of  2.6% – below the national average of 3.6%
  • A small business employment rate of 47% – employing nearly half of all private-sector Virginian workers
  • Nearly 725,000 small businesses – comprising 99.5% of all Virginia-based businesses
  • No need for a business license for sole proprietors


The diversity of Virginia’s economy is also worth noting, particularly when compared with other states that typically have at least one especially strong industry (like the oil industry in Texas). Sources of information provide different answers as to which industries are the strongest in Virginia, but we’ve filtered through to give you the following list.


Top 8 industries in Virginia by % of state GDP (according to Federal Reserve Bank of Richmond):


  1. Professional Services – 20.7%
  2. Financial Activities – 17.8%
  3. Transportation – 13.9%
  4. Manufacturing – 8.6%
  5. Education & Health Services – 7.5%
  6. Information – 3.9%
  7. Construction – 3.5%
  8. Leisure & Hospitality – 3.1%


If you’re currently working in any of those industries, or interested in getting started, there’s still room to grow in Virginia. Just take Amazon as a ‘prime’ example. After lots of deliberation and consideration, Amazon recently announced their decision to base their second headquarters in Crystal City, Virginia – ostensibly because of those strengths noted above.


For small businesses, though, there may be a few more challenges to overcome before successfully establishing a base of operations in Virginia. And for those obstacles, small businesses can often turn to business loans to help them get by. But how do small business loans in Virginia work? Keep reading to find out…


How to fund a business in Virginia


As is the case with running a business in any state, there are cons that come along with the pros of being a Virginia business owner.


The difficulties of operating a small business in Virginia include:



It’s true that the potential setbacks that small Virginian businesses may face are numerous. Fortunately, there’s also a wide variety of alternative business loans in Virginia. Let’s take a look at which financing options are available to small businesses in Virginia.


Non-payment of Invoice


Virginia business loans


Before we dive right into the different kinds of business loans in Virginia, it’s important to note that determining which type of financing is best for your business depends on several factors. You’ll want to have the following details in mind before applying:


  • Which industry do you work in?
  • What do you intend on doing with the funds?
  • Is your business financially healthy and stable?
  • How quickly do you need the money?
  • And more


You can also use these resources to improve your loan application approval odds:

How to Apply for a Small Business Loan

How to Become Eligible for Business Loans

How Hard Is it to Get Approved?


Once you have answers to those questions, you’ll want to consider the variety of small business loans in Virginia. Be sure to compare the pros and cons of each type of financing prior to applying.


Among the reasons why business loan applications get rejected is applying for the wrong type of loan. So, if you want to keep yourself from being one of those loan rejections, take a few minutes to learn a bit more about the differences between the following types of business financing.


Top 6 types of small business loans in Virginia:


1. SBA loans

If you’re able to qualify for small business administration loans in Virginia, then chances are you’ll want to take one. Since this is a type of business financing that is backed by the government, lenders will provide some of the best terms and rates possible when they’re providing small business administration loans in Virginia.


Top Pro: Low monthly payments

Top Con: Not for startups

Quick Facts about SBA Loans & Requirements:

  • Credit Score: 600+
  • Time in Business: 3 months minimum
  • Loan Amount: Up to $350k
  • Time to Funding: 14 days minimum
  • Loan Term: Up to 10 years
  • Top Lender: SmartBiz


See if I Qualify – SBA Loans


2. Unsecured loans

Unsecured business loans are a kind of financing that doesn’t require any form of collateral in order for you to qualify. So, if you’re short on valuable assets (or if you don’t want to put them at risk), then you should consider applying for this form of business financing. Just keep in mind that the rates tend to be higher than other kinds of business loans.


Top Pro: No risk to personal assets

Top Con: Higher interest rates

Quick Facts about Unsecured Loans & Requirements:

  • Credit Score: 350+
  • Time in Business: 6 months minimum
  • Loan Amount: Up to $250k
  • Time to Funding: 3 hours minimum
  • Loan Term: 6-24 months
  • Top Lender: OnDeck


See if I Qualify –  Unsecured Loan


3. Lines of credit

A line of credit works very similarly to a credit card, where you’re able to use the funds as needed and up to a designated credit limit. If you need a flexible form of business financing, then a line of credit can be the solution that you’re looking for. Just be careful not to use a line of credit too loosely, as you can run the risk of getting yourself stuck in a cycle of debt.


Top Pro: Use funds as-needed

Top Con: Penalties for late payments

Quick Facts about Line of Credits & Requirements:

  • Credit Score: 300+
  • Time in Business: 3 months minimum
  • Credit Line: Up to $100k
  • Time to Funding: 4 hours minimum
  • Interest Rates: As low as 4.66%
  • Top Lender: Fundbox


See if I Qualify – Line of Credit


4. Invoice factoring

Looking for a way to effectively deal with slow or even non-paying customers? Invoice factoring is a way to access money that’s stuck in unpaid invoices. The lender will give you around 80% of the value of those unpaid invoices and then the remaining 20% once they collect the payments on your behalf.


Top Pro: Access funds tied up from slow-paying customers

Top Con: Placing customer relationships in the hands of a third party

Quick Facts about Invoice Factoring & Requirements:

  • Credit Score: 530+
  • Time in Business: 3 months minimum
  • Loan Amount: Up to $5 million
  • Time to Funding: 3 hours minimum
  • Loan Term: 1-13 weeks
  • Top Lender: BlueVine


See if I Qualify – Invoice Factoring


5. Equipment financing

There are multiple industries wherein businesses have a strong dependence on having properly functioning equipment – restaurants, construction, manufacturing, auto repair, etc. Whether you’re looking to purchase or lease equipment (or even repair equipment), this type of business loan can be a huge help. Plus, the equipment serves as its own collateral!


Top Pro: No collateral needed

Top Con: Equipment devalues quickly

Quick Facts about Equipment Financing & Requirements:

  • Credit Score: 450+
  • Time in Business: 3 months minimum
  • Loan Amount: Up to $250k
  • Time to Funding: 2 hours minimum
  • Loan Term: Up to 5 years
  • Top Lender: Everlasting Capital


See if I Qualify – Equipment Financing


6. Merchant cash advance

If you need fast access to business funding, then a merchant cash advance can come to the rescue in your time of need. It’s important to point out that MCAs balance that quick and easy access of funds with high interest rates, short repayment terms, and frequent payment requirements (weekly or even daily). Plus, they’re repaid with a percentage of future credit and debit card transactions – so if your business doesn’t have a high volume of those sorts of payments, you may want to consider other forms of business financing.


Top Pro: Fast access to cash

Top Con: High interest rates

Quick Facts about MCAs & Requirements:

  • Credit Score: 500+
  • Time in Business: 6 months minimum
  • Loan Amount: Up to $150k
  • Monthly Revenue: $12k minimum
  • Loan Term: 2-10 months
  • Top Lender: Uplyft Capital


See if I Qualify – MCA


Local Virginia business grants


When it comes to Virginia business grants, there are quite a few that you may be able to obtain. And, as opposed to business loans, business grants are funds that come with no repayment. And they always said there’s no such thing as a free lunch!


Just keep in mind that there are still criteria that your business will need to meet in order to qualify for a Virginia business grant. Those criteria may include the size of your business, the intended use of the funds, where your business is based, and so on.


Here are a few local Virginia business grants to take into consideration:


  • Virginia Investment Performance Grant (VIP)
    • The business must be a manufacturer and be based in Virginia
    • Funds must be used to increase capacity, modernize, increase productivity, or create, develop, or utilize advanced technology
    • Amounts vary and are determined by the Secretary of Commerce and Trade


  • Virginia Economic Development Incentive Grant (VEDIG)
    • Available to businesses based in Virginia and outside of Virginia (stipulations differ)
    • Main purpose of this grant is to create new employment opportunities
    • Amounts vary and are determined by the Secretary of Commerce and Trade


  • Small Business Jobs Grant Fund Program
    • Available to businesses earning annual revenue of $3 million+ and employ 50 people or less
    • Available to manufacturers, R&D, information technology, distribution centers, and inbound call centers
    • Provides $500-$2,000 to offset hiring costs


There are several other Virginia business grants that your small business may be able to qualify for, so it’s best to do your due diligence on which fit your needs the best. The bottom line is, if you can qualify for Virginia business grants, you have every reason to apply!


Wrapping it up


With such a strong economy, it’s abundantly clear that taking a small business loan in Virginia is a worthy investment. And, since business loans in Virginia come in many shapes and sizes, there’s a solution for you whatever the reason might be. Get the financial boost you need to keep your Virginia-based business running at full capacity!


Small Business Failure Rate

Disclaimer: The information contained in this article is provided for informational purposes only, should not be construed as legal advice on any subject matter and should not be relied upon as such. The author accepts no responsibility for any consequences whatsoever arising from the use of such information.