Virginia Small Business Loans

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With a population of over 8.5 million people, the state of Virginia is an incredibly diverse commonwealth. Located in the Mid-Atlantic region, the geography and climate are shaped by the Blue Ridge Mountains and the Chesapeake Bay. Virginia’s capital is Richmond, but the state’s largest city is Virginia Beach. Fairfax, which includes Alexandria, near Washington, D.C., is the most populous county.

Virginia is a diverse economy that includes local and federal government agencies, military, farming, tourism, and high technology. Virginia has the highest concentration of technology workers of any state and the fourth-highest number of technology workers. Virginia is considered one of the top supporters of small business ownership efforts.

With all that Virginia has going for it from an economic perspective, small business owners still face many challenges getting approval for traditional business financing from lenders like banks and credit unions. These lenders often have strict guidelines, credit requirements, mountains of paperwork, and limited business loan products to offer to small businesses. That’s where AdvancePoint can come in to help: we have a wide variety of financing options available that credit unions or banks do not offer.

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How To Get a Small Business Loan in Virginia?

AdvancePoint has a business lending marketplace full of a variety of alternative loan programs for small businesses. When it comes to small business loans, Virginia has a wide variety of options.

The 9 Best Small Business Financing Options for Virginia Small Businesses

1. Long-Term Business Loans for Virginia Small Businesses

Lenders define long term small business loans as small business loans with a duration greater than two years. Businesses are offered a fixed amount of upfront and charged principal & interest. Unlike a business line, a business owner cannot draw money as you go with long term loans. Typically, long term loans are for business expansion and growth or to finance large projects. The loan amount will vary depending on the revenue of the business and lender.

Product Overview

Interest Rates: Starting at 5.50% or treasury index plus 1% to 2.5%
Terms: 2 to 10 years
Fees: Origination fees range from 0% to 3% (depends on risk and lender)
Loan Payments: Monthly or bi-weekly
Credit Score Standards: Good to excellent preferred. All types are considered.

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Long-Term Business Loans

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2. Business Lines of Credit for Virginia Small Businesses

Business lines of credit are open revolving lines of credit. This type of funding allows businesses to draw funds when needed on-demand or make purchases—a business line charges a principal & interest rate. Business lines of credit have a credit limit that cannot be exceeded without a lender’s approval and is not open-ended forever. It requires renewal by lenders either semi-annually or annually to be extended.

Product Overview

Interest Rates: Starting at 5.50% or treasury index plus 1% to 2.5%
Terms: Open revolving line
Fees: Origination fees ranging from 0% to 3% (depends on risk and lender)
Payment: Monthly, bi-weekly, or weekly
Credit Score Standards: Good to excellent preferred. All types are considered.

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Business Line of Credit

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3. Short Term Small Business Loans for Virginia Small Business

Short term business loans are defined as loans that are typically repaid with 6 to 18 months. These loans feature a lump sum offered upfront with a fixed payback amount calculated using a factor over a short term of time. Rates are not principal & interest but a “factor rate” that costs more than traditional loans. Most businesses choose short term business loans when they do not qualify for conventional business loans. Short term loans charge more for costs and are shorter in the duration of repayment, and the payments are more frequent to compensate for the higher risks business lenders take in offering this product. These loans are popular with small businesses because of the reduced documentation requirements and credit tolerances that are laxer than traditional loans. The loan amount will depend on the annual business revenue of the company and the lender’s requirements.

Product Overview

Interest Rates: Factor rates range from 1.09% up to 1.45%
Terms: 6 to 18 months in duration (typically 12 months or less)
Fees: 0% to 5% origination fees (depends on lender and risk)
Payments: Weekly, bi-weekly, and in some cases daily (Monday-Friday)
Credit Standards: All types considered

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4. Business Cash Advance for Virginia Small Business

Business cash advances (BCA), also known as a purchase of future sales agreements, advance future sales at a discount to a business. The business is responsible for paying back a fixed payback amount known as a specified amount, which is higher than the amount that was advanced to the company. This difference between the advance amount and the payback amount is called the “Factor Rate or cost,” which is a fixed cost. This is not principal & interest costs. The advance is repaid by taking a fixed percentage of future overall deposits called the specified percentage.

The payments are collected by an ACH fixed daily or weekly payment deducted from a business account based on the specified percentage of future sales. At the end of every month, reconciliation can occur. If the fixed costs taken out of the bank account monthly are more than the set future percentage of monthly sales, business owners can request a refund to the business for overpayment so that the set specified percentage of sales collected for the company matches the revenue volumes. Repayment continues until the payback amount is paid back in full.

There is no time limit with advances as the fixed payback percentage ever changes due to fluctuating revenue. You do not need to provide a business plan. The most popular use for a business cash advance is working capital.

Product Overview

Rates: Ranges from 1.09% up to 1.45%
Terms: No time limits. Payments continue until paid in full based on a specified percentage collection method and are dependent on future revenues.
Fees: Origination fees that range 0% to 5%
Payment: Weekly or daily Monday-Friday Fixed ACH
Credit Standards: Poor to excellent accepted. All types are considered.

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Business Cash Advance

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5. Merchant Cash Advance for Virginia Small Businesses

merchant cash advance A merchant cash advance (MCA) is also known as a purchase of future sales agreement. This lending option operates very similarly to BCA’s, but the most significant difference is the repayment process, which connects to future credit card revenues instead of overall sales. MCA’s take a set percentage of future credit card sales at the time of batch of credit cards until the advance is paid back in full. Businesses find this valuable when revenue frequently fluctuates, and they don’t want to be locked into a fixed payment that could negatively impact cash flow or margins of profit. This product is another excellent working capital solution.

Product Overview

Rates: Range from 1.09% up to 1.45%
Terms: No time limits (payoff depends on future credit card sales)
Fees: Origination fees range from 0% to 3%
Payment: Set fixed percentage of future credit card revenues
Credit Standards: All types considered, from poor, fair, good, or excellent.

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Merchant Cash Advance

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6. Equipment Loans and Financing for Virginia Small Businesses

Virginia area businesses that use sophisticated equipment during operations often turn to equipment financing lenders to purchase equipment using the equipment as collateral. Business owners must have very good to excellent credit, but the good news is limited paperwork is required for approval.

Product Overview

Rate: Range from 1.09% up to 1.45%
Terms: 2 to 7 years
Fees: Origination fees range from 0% to 3%
Payments: Weekly or daily (Monday-Friday) fixed ACH
Credit Standards: All types considered (Lenders vary on credit score requirements)

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7. Small Business Administration (SBA) Loans for Businesses in Virginia

The Small Business Administration (SBA) provides programs, guidelines, and loan guarantees to approved Virginia SBA Lenders to issue business loans to small businesses. The Small Business Administration’s (SBA) mission is to help American enterprises to start, build, and grow their businesses successfully. The SBA is not a lender. The Small Business Administration provides a guarantee that gives the approved lenders the ability to take on the risk of business lending under Small Business Administration (SBA) terms that they would not ordinarily do so on their own and has rights reserved for any recourse need.

The Small Business Administration (SBA) loans are highly sought after by Virginia small businesses, and there are many approved lenders to choose from. It can be expected for an SBA loan to require a business plan. SBA application processes can be lengthy, but with an experienced SBA-approved lender, the application package can be a smooth and efficient process.

Product Overview

Rate: Starting at 5.50%, treasury index plus 1% to 2.5%
Terms: 3 to 25 years
Fees: Origination fees 0% to 3%
Payments: Fixed monthly
Credit Standards: Good to excellent preferred, but all credit considered (all rights reserved)

Small Business Administration Resources

SBA Standard 7 (a) Loan Program- SBA loan 7(a) is the SBA’s primary program is designed to provide financial assistance to small businesses with a good track record. Like the guaranty percentage and loan amount, the terms and conditions may vary by the type of loans to small businesses.

SBA Loan Program 504- The SBA 504 Loan is a powerful economic development loan program that will provide small businesses another avenue for business financing while promoting business economic development and job creation. Business owners must utilize proceeds from SBA 504 Loans for fixed assets such as construction, owner-occupied commercial real estate, mixed-use real estate and or land improvements (and certain soft costs), or can also be used to refinance existing debt.

SBA Disaster Loans- Economic Injury Disaster Loans (EIDL)-This type of SBA loan not only provides assistance after natural disasters like tornadoes, wildfires, or floods but when President Trump declared COVID -19 a nationwide health emergency based on the recommendation of the CDC on March 13th, congress provided small businesses access to this program for emergency financing.

SBA Paycheck Protection Program (PPP) loan- The Small Business Administration (SBA) has established the SBA Paycheck Protection Program loan. This SBA loan provides loans to small businesses affected by the COVID-19 crisis and needs financial help. Under the right conditions, this loan program offers forgiveness.

SBA Virginia Resources

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Small Business Administration (SBA) Loans

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8. Invoice Financing for Virginia Small Businesses

Invoice financing advances the outstanding balance to a business owner to increase the speed of cash flow to the business. This solution provides cash quickly, and there is no need to wait for outstanding invoices to be collected and received by the client with invoice financing in place. Invoice financing has affordable costs ranging from 1% to 2.5% fee off of the face value of the invoice advanced.

Product Overview

Rates: None
Terms: Not a traditional loan
Fees: 1% to 3% fee based on the invoice. Monthly Service fees may apply depending on the volume of invoices factored
Credit Standards: The client’s credit must be favorable, NOT the owner advancing off invoices.

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Invoice Factoring

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U.S. Small Business Administration

How to Grow Your Business in Virginia
View the Virginia Small Business Resource Guide for information and assistance in growing your local business, exploring funding options, and contracting.

Grow Your Business in the Washington Metropolitan Area
View the Washington D.C. Small Business Resource Guide for information and assistance in growing your local business, exploring funding options, and contracting

The quick, convenient, and straightforward way to get the funding you need for your business – now!

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Why Do Virginia Small Business Owners Need Financing?

The list of the most common reasons and uses of proceeds from business financing:

  • Working capital
  • Equipment
  • Inventory
  • Business plan expansion (capital for growth)
  • Financial support for business loans
  • Special projects
  • Cash flow shortages
  • Website design
  • Emergencies
  • Advertising and marketing
  • Employees
  • Any legitimate business purpose, project, or use

Frequently Asked Questions

It is not difficult to obtain business funding in Virginia. There are many business lenders and funder’s that service Virginia. Choose your lender wisely. There is no down payment required for most business loans or alternative business funding.

There are many business lending options available for business owners with bad credit. Financing options will vary depending on the risks associated with this type of funding and impact terms, pricing, and costs. The business loan amount may also be limited due to bad credit as well.

Business credit cards are the only reliable no documentation product. Consider other products with reduced documentation requirements. However, the less documentation you provide, the less favorable options will be available.

Getting start-up business loans can be extremely difficult and challenging. SBA loans are the most traditional option, but gaining approval for them is challenging. A business’s search will need to include non-traditional means to raise money like private sources or investors.

Initiatives, Programs, and Small Business Grants for Small Businesses in Virginia: Additional Resources, Support, and Information About Small Business Loans

The Virginia Small Business Financing Authority has the Small Business Investment Grant Fund

Virginia Economic Development Loan Fund- A companion loan for fixed asset funding needs designing to fill the financing gap between the bank’s loan and private equity. In these transactions, the business client has two loans, one from the bank and one from the VSBFA. Where warranted, the VSBFA will consider being in a subordinate position to the bank and can sometimes offer more flexible terms to help the business’ temporary cash flow needs.

Virginia SWaM Business Loan Fund- This is a direct loan from the VSBFA to the business client that does not require a bank’s participation in the transaction. It is an ideal tool for bankers who are faced with business loan requests for minimal amounts where the bank would prefer to refer the client to an alternative source of funds.

Virginia Child Care Financing Program- This is a direct loan from the VSBFA to a child care center or a family home provider. Bank participation is not required, although the bank will frequently provide financing for the center’s land and building. The VSBFA can give a loan for the other necessary items the center needs, such as cots, fencing, playground equipment, buses, etc.

Virginia SSBCI Cash Collateral Program- Most typically used in those situations where the business loan applicant has the demonstrated ability to cash flow the debt, but the collateral coverage is insufficient for the bank’s typical underwriting standards. This program can be used for lines of credit or loans.

Virginia Loan Guarantee Program- This is a traditional deficiency guarantee of a bank loan. It can be used for credit lines or loans any time the bank believes it needs additional support to approve a business loan request.

The Virginia Department of Small Business and Supplier Diversity (SBSD)- The mission of the Virginia Department of Small Business and Supplier Diversity (SBSD) is to enhance growth opportunities for Virginia’s small businesses to prosper through increased revenue and job creation thereby raising the standard of living for all Virginians. The Virginia Department of Small Business and Supplier Diversity (SBSD) has four Divisions including; Business Certifications, Business Development and Outreach Services, Virginia Small Business Financing Authority, and SBSD Agency Administration.

Virginia Community Capital (VCC) – Small Business Lending division works with for-profit and non-profit businesses as well as municipalities around the Commonwealth to find creative ways to support growth development.

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