The Importance of Small Business Financing in Virginia

Virginia is the place to be for small business.

According to the 2020 Small Business Profile by the U.S. Small Business Administration Office of Advocacy, Virginia has 766,826 small businesses, making up 99.5% of the total businesses in the commonwealth. That’s a lot of small businesses — and their success is no coincidence.

There are many reasons why small business financing in Virginia is a smart choice for business owners and lenders alike. Business Insider recently reported that Virginia has the highest ratio of businesses start-ups to businesses collapses. For every business that closes, twice that amount opens.

Benefits of Small Business Financing in Virginia

Virginia boasts well-educated employment candidates and a fantastic business survival rate. If you are thinking of starting a small business or a lender looking to invest in small business financing in Virginia, the risk is low, and you will be satisfied knowing you are making a positive contribution to both the local and state economy.

Virginia’s small business also benefit from high-speed internet via trans-Atlantic cables, business incubators, a strong economy and plenty of connections including 14 airports as well as the Port of Virginia.

It’s no wonder that in 2019 Virginia was named as the best state in which to do business by CNBC. Prior to achieving first place, the Virginia Chamber created Blueprint Virginia 2025, which serves as a business plan for the commonwealth. The plan helps Virginia work on policies that improve the commonwealth’s standing and continues to serve as a guiding strategy document to the state’s future economic success.

Options for Small Business Financing in Virginia

When you are ready to make the choice to start or expand a business in the top state in the country, experts recommend putting an SBA 504 small business loan at the top of your list for financing options.

The first step? Finding a Certified Development Company in your area. You can locate a CDC in the Virginia area by consulting a list of companies available on the SBA website and searchable by zip code. A CDC is eligible to offer loans in the state it was chartered.

Once you find a CDC you’d like to work with, schedule an appointment to find out more about the program, the advantages, and eligibility.

The SBA loan program has three sources of funding for small business financing in Virginia. A commercial, third-party lender holds the first mortgage position and typically offers up to 50 percent of the project cost. The SBA 504 loan-backed portion from a CDC will act as a second mortgage, financing up to 40 percent of eligible project costs. The remaining 10 percent (an equity investment) will be the small business owner’s contribution.

SBA 504 loans can be used for large investments such as purchasing equipment or machinery; purchasing existing buildings; purchasing land and land improvements (street grading, utilities, parking lots); building new facilities; renovating, remodeling, or converting existing facilities; or refinancing existing debt that’s connected with an expansion of your business.

CDC 504 loan benefits, other than low-interest rates, include generous term lengths, financing for up to 80 to 90 percent of project costs, and minimal down payments.

To learn more about small business financing in Virginia, locate a reputable certified development company in your area and head to success in the state with a great reputation.