Top 6 Options for a 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.
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.
Virginia Economic Development Loan Fund (EDLF), 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 small business has already received a bank loan. As such, the small business 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 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
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 a 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.
In Virginia, SWaM stands for “Small, Women-owned, and Minority-owned” business. The Virginia SWaM Business Microloan Fund is also 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
So far, we have looked at various options for Virginia small business loans, - yet, all of them will cost you quite a bit in interest repayments. 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.
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.