Find the Best Business Loan Companies in Richmond, VA

Types of business loans in Richmond

Finding a lender in Richmond is fairly easy, but getting approved for a business loan with fair rates and terms can take a bit of time. That’s because lenders set their own rules for approval, which is why it’s extremely important to compare different lenders and their terms before settling on one. Most lenders will offer a pre-qualification or preapproval letter that will outline the interest rates, term length and lending amount, which you can use to compare options to find the right loan for your needs.

Popular types of business loans in Richmond include the following:

• Commercial mortgage loan: A commercial mortgage loan is for a business owner who needs to buy real estate in order to grow their business. Many business owners in Richmond are buying old buildings and renovating them. This type of business real estate financing can help cover those costs.
• Business line of credit: Business lines of credit offer owners the flexibility of financing when and if they need it. With a line of credit, business owners have access to a certain amount of funds every month that they can use as they wish. This is similar to a business credit card, but without the rewards and typically with a lower interest rate.
• SBA loan: SBA loans are financing options offered in conjunction with the Small Business Administration. With an SBA loan, the SBA guarantees a certain portion of a loan to make it more appealing to a lender that is otherwise hesitant to lend to a business owner. These government loans for businesses are a great option, but also usually come with higher standards for approval and take longer to obtain.
• Equipment financing loan: Equipment financing loans can only be used to purchase equipment or vehicles for a business. These types of loans use the equipment as collateral in case the borrower defaults on the loan. Rates on equipment financing loans are generally attractive.
• Merchant cash advance: Just like a traditional cash advance, a merchant cash advance is a lump sum payment for business owners who need cash fast. With an MCA, lenders look at how much a business makes in a day or week to assess how much it can realistically pay back in a short period of time. Rates are typically very high with these types of advances, but funds are available quickly.
• Business term loans: Business term loans provide a lump sum of capital upfront, which a business then pays back in fixed payments over time. Typically, there are two different types of term loans: short- and long-term loans. Short-term loans are better for small projects that can be paid back in a shorter amount of time without costing the business too much. A long-term business loan is better for investments that require a lot of money, like expanding the business to a new location, where paying back over a longer period of time is a better financial decision.

There are also a few other types of business loans available to business owners, like business invoice financing and business microloans. Microloans are small amounts of money given to small businesses that need some financial support. Business invoice financing is a specific, asset-based financing option that utilizes outstanding customer invoices as collateral for funds.

It is highly recommended that you do your research before going to a lender so that you can make an educated decision. You should also only work with lenders that have a strong reputation. Read reviews from customers, and ask people you trust if they have recommendations on lenders.

How to get a business loan in Richmond

Before getting a business loan in Richmond, research the various options and the associated lending requirements. Have an idea of how much you want to borrow, and check your business credit report and your personal credit report to find out areas where you can improve your creditworthiness.

It helps to have the right documents ready. You should have financial statements, bank statements, financial projections, multiple years of tax returns and your business license ready when applying for a business loan in Richmond. Allow yourself enough time to shop around for a business loan with the most favorable terms.

Richmond business loan FAQ

Do banks in Richmond give loans to start a business?

Yes, some banks in Richmond provide startup loans for businesses. Some also work with the Small Business Administration to offer more affordable rates and terms for new business owners as well.

What is a 504 loan program?

The 504 loan program provides long-term, fixed-rate financing to approved small businesses that can be used to modernize or expand a business. This is a program through the Small Business Administration, which works with community-based partners.

What business development resources exist in Richmond?

Certain organizations in Richmond are designed to support the quick and efficient growth of businesses, including the Virginia SBDC and SCORE Richmond.