Small businesses all across the country rely on borrowed capital to fuel growth and keep their businesses working. The same applies to small businesses in Virginia. Keep reading to learn more about Virginia small business loans.

With nearly 750,00 small businesses in Virginia, there are a lot of people employed in Virginian small businesses—roughly 1.5 million employees. That’s nearly half of everyone employed in a private business. In other words, Virginia small businesses are an important part of the state economy.

Although there are a lot of small business loan options available to business owners, they may be more difficult to get at a local bank. In fact, in recent years the number of banks in Virginia has declined. And, since 2009 there have been no new startup banks chartered in Virginia.

That doesn’t mean a Virginia business can’t find a small business loan, they just might have to look in different places.

How a Virginia small business loan can help you

Small businesses leverage borrowed capital for a lot of different reasons. It can fuel growth, bridge a slow season, or fill a short-term cash flow gap just to name a few.

In reality, there are more small business financing options available today than ever before, but finding the right option for your business will require you to be a little more savvy as you consider what’s available.

Options for Virginia small business loans

The Virginia Small Business Financing Authority (VSBFA) has been providing businesses and nonprofits in Virginia with the capital they need to grow and expand for over 30 years. 

In addition to the VSBFA, there are other options to consider, depending on your businesses financial condition and the type of financing you might be looking for.

SBA Loans

With the exception of their disaster loan program, the Small Business Administration (SBA) is not a lender. SBA member banks typically offer loans to small businesses in Virginia that are part of the SBA loan guarantee program. The interest rates for an SBA loan are often some of the lowest with very favorable terms. This option for low-interest loans with long repayment periods offered through the U.S. Small Business Administration is worth considering if your business qualifies. Some of these loans are also specifically targeted for economic development in disadvantaged areas, while others are available to any qualifying small business.

Traditional Bank Loans

The local bank has traditionally been the source of small business financing for small businesses for the last 100 years. If your personal credit score is above 680 and your business credit history is good, a loan at the bank is another good option for low interest rates and favorable terms.

Online Loans

Whether you’re looking for a short-term loan or something with a longer term, small business loans are available through online lenders. What’s more, the application process is simple and you can often get an answer on your loan application in as little as 24 hours. Depending on the lender, loan amounts can vary from $5,000 to $500,000 or more and the qualification criteria is less stringent than the bank or the SBA.

A Business Line of Credit

A business line of credit is probably one of the most popular ways to access borrowed capital for most business borrowers. It’s flexible, it’s quick to access cash once it’s in place, and the business borrower only has to pay interest on the amount of credit they use. A line of credit also allows small business owners to access the credit line, repay the LOC and use it again.

Business Credit Cards

Business credit cards are another flexible way for businesses to access borrowed capital and are one of the few ways a start-up, or early-stage business, can leverage credit to access working capital to meet business needs. 

Many business credit card providers will often rely on your personal credit history to approve a business credit card, meaning if you have a good to excellent personal credit score, you can get approved for a number of business credit cards.

Equipment Financing

Equipment financing is another option for many small businesses. This is a good option because many things a business needs can be considered equipment—it isn’t just large construction or manufacturing equipment. For example, the pizza oven in a restaurant or the computers in an office are all considered equipment.

Because the equipment being purchased acts as collateral, many businesses that might not qualify for a more traditional term loan or line of credit may qualify for an equipment loan.

Microloans

If your business can leverage a smaller loan amount into a big impact, a microloan might be a good option for you. Some microloans are even available with very low or even no interest.

How do I get a small business loan in Virginia?

Depending on the lender you choose you will either need to visit the bank or credit union where you intend to apply or you can in many instances apply online. If you are looking for an equipment loan, many equipment dealers offer financing when you purchase—or you can apply online.

Online lenders may have very short applications that require little more than your business details, time in business, and annual revenues.

How much can I get in a Virginia small business loan?

Loan amounts will vary depending on the nature of the loan, the lender, and your creditworthiness. Microloans for instance will likely be an amount less than $50,000 (the SBA’s threshold) to as low as $5,000 or $10,000.

Some online lenders will go as high as $500,000 to qualified borrowers and a bank or credit union in Virginia might lend as high as several million dollars.

How to get an SBA loan in Virginia

Although the SBA does not make loans directly, any participating SBA lender will accept your loan application for one of the SBA’s loan offerings. You can also apply for an SBA loan through Nav or speak with a local SBA representative in Virginia at 804-771-2400.