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Virginia Small Business Loans - How to Get a Small Business Loan In Virginia

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Virginia Small Business Loans - How to Get a Small Business Loan In Virginia

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What is the easiest SBA loan to get approved for in Virginia?

The Small Business Association offers several different loan options that help Virginia business owners get the capital they need to start or grow their businesses. But if you’re looking for the easiest option, an SBA microloan might be your best choice. 

These loans are issued by local nonprofit community lenders who can set their own rates and requirements. While the average SBA microloan is about $13,000, Virginia business owners can borrow up to $50,000 for a variety of business needs like starting their business, covering expenses, expanding and more.

You can view a list of SBA Loans providers on the SBA website here

What types of small business loans are available in Virginia?

Virginia business owners can benefit from a wide range of small business loans from traditional banks, credit unions, or online lenders. Each has a different purpose and target audience to help support small business owners in the state. 

Some examples of government-backed loans include  SBA 7(a), SBA microloans, SBA 504, and SBA Express. While these are great for business owners without a strong credit history, they can also take a long time to get approved and funds transferred. 

If you need funds quickly, you’ll likely want to look into a more traditional Term Loan  through an online lender. These lenders often have quick, online applications and you can get funds in some cases as quickly as a day or two. But beware, you might face higher interest rates with this option. Some alternatives to traditional loans include working capital loans like Merchant Cash Advance, Equipment Financing and Invoice Financing.

Don’t forget to look into local small business grants! These options provide funding to Virginia businesses and are highly competitive but offer one clear benefit —  you won’t need to repay the funds. While grants can be a blessing, they may not solve all financial problems or barriers. Stay proactive as a business owner - it will pay off in the end. 

What are the minimum requirements for a small business loan in Virginia?

When you’ve determined what kind of Virginia small business loan is best for you, you can reach out to a lender that offers that product, and they’ll provide you with their specific requirements for that product. Since each lender and loan product has a different set of requirements, there is no one-size-fits-all requirement for a small business loan. 

Most lenders, at a minimum, will have the following requirements or similar in place:

  • Good personal and business credit scores
  • Annual revenue requirement
  • Years in business requirement 
  • Detailed business plan
  • Business and financial documentation to support application claims

If you’re applying for an SBA loan, there are a few requirements for all SBA loans: 

  • Be a for-profit business
  • Do business in the United States
  • Have invested time or equity in the business as a business owner
  • Exhausted other financial lending options

What credit score is needed to get a Virginia small business loan?

Most traditional banks prefer applicants with a credit score of 680 or higher in order to be eligible for their financing programs. Don’t worry, though - if your credit score is below 680, there are still lending options available to you through the SBA or other online lenders that usually have less strict requirements for lending. Keep in mind, in most cases your business and personal credit score will be considered. While you may be familiar with your personal credit score, you may not be so familiar with your business credit score. As a business owner, you’ll need to stay on top of financials. Lean on mySMBscore to better understand your business credit score and how it can help or hurt you when qualifying for a small business loan in Virginia.

How much does it cost to start a business in Virginia?

Starting a business doesn’t have to break the bank! In order to be eligible for most of Virginia’s small business loans, you’ll have to have an officially registered business or LLC. To file for an LLC - otherwise known as a limited liability corporation - you will have to submit your company’s Articles of Organization with the Virginia State Corporation Commission. This costs a filing fee of $100, but will register your business as an official entity in the state of Virginia. Keep in mind that depending on your industry and other local regulations, you might have to also register for permits or licenses to legally operate in the state. 

To register your LLC, you’ll have to have a registered agent associated with your LLC. A registered agent is simply a person or corporation that is responsible for legal documents, taxes, and other important business matters. Virginia allows you to be your own registered agent, but if you prefer to hire a third-party company, this could also be an added fee. 

While not required, there are a few additional fees you can pay during the LLC process to legitimize your business further. You can register a “Doing Business As” name for $10, or reserve your LLC name for 120 by paying a $10 fee. 

We do recognize there are other legal entities when it comes to establishing a business such as a sole proprietorship. To establish a sole proprietorship you’ll need to pay a small fee and apply for a sales tax certificate. Virginia is a “general” business license state so you’ll likely need a license from the county your business operates in. Contact the local government for more information about how to start a legitimate business in Virginia. 

What amount should I get for a Virginia small business loan?

Of course, each entrepreneur and small business owner in Virginia will have different needs for a business loan. You should take some time to calculate and fully understand how much money you need so you can borrow responsibly.  Once you have determined how much money you need to borrow, you can seek out the loan option that’s best for you.

If you need less than $50,000, an SBA microloan could be a good option for you. If you’re a larger business or need to borrow more than $100,000, you might want to explore a traditional bank or online lender that offers small business loans in excess of $500,000. 

Is it hard to get approved for a small business loan in Virginia?

With so many options available for Virginia business owners, there are countless ways to get approved for a small business loan. The first thing to do is to understand where you’re at financially. This means taking some time to understand your personal and business credit score so you know where you stand. With mySMBscore, you can take the guesswork out of the process and get your business credit score and get an overview of your company's financial situation. You’ll be able to see how lenders gauge the risk of offering credit to your business and see how to make improvements to help your eligibility.

If you have poor personal credit or have a limited business credit history, there are still options available to you through working capital loans or SBA government-backed programs that are designed for small businesses. However, it’s a smart investment to take advantage of resources such as mySMBscore and boost your business credit before applying for a loan. 

Do I need a small business license in Virginia? 

Yes and no - While Virginia doesn’t require a business license for the state, your local county or city will likely have its own licensing requirement for businesses operating in the locality. You should check with your local commissioner's office, but fees are usually minimal for smaller businesses. If you fail to get a business license or continue to do business without the right approval, you could face fees and your business could be shut down. So, it’s important to take the time and look into your city or county’s requirements. 

What other resources are available for Virginia small businesses?

Starting a small business can feel daunting on your own. Luckily, there are a lot of resources available for Virginia small business owners looking to learn more about the process, and get support or funding for your company. Some popular resources include:

How to get a small business loan in Virginia

The first step in getting your small business loan is to do your research. Knowledge is power when it comes to finding the right small business loan in Virginia. When you receive a loan offer you may wonder naturally if it’s a good offer. Or, you may just be excited you qualified and jump the gun to accepting. We encourage business owners to slow down and take their time when it comes to getting a small business loan in virginia. It’s a big decision. To start the process, access your business credit score along with actionable insights at mySMBscore. The knowledge of understanding what your business can qualify for can help you save money on your next business loan, thus driving the bottom line. Once you’ve found your footing and know what you’re looking for you can proceed with determining what type of loan is best and comparing offers. Did we mention you can also compare business loan offers with no credit impact at mySMBscore? It’s true - you can!

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