Virginia Small Business Financing Authority (VSBFA) Loan Guaranty Program
Virginia Small Business Financing Authority (VSBFA) — Virginia Department of Small Business and Supplier Diversity (SBSD)
Up to 75% / $1M guaranty
Researched for this program: 4 rejection traps · 5 required documentsWhat decides this award ↓
State guaranty unlocks your bank loan
A credit-enhancement program in which the VSBFA guarantees a portion of a bank loan or line of credit extended to a qualified Virginia small business, reducing the lender's risk so the business can access financing it could not otherwise obtain. The maximum guaranty is the lesser of 75% of the credit amount or $1,000,000. Guaranties can support a short-term line of credit (renewable annually, up to four renewals) or a term loan up to seven years. The program is initiated by the commercial bank, not the business, and VSBFA typically processes a complete request within about one week.
- Funding type
- Loan
- Level
- State
- Amount range
- Up to 75% / $1M guaranty
- Realistic amount
- The guaranty backs bank credit facilities that are commonly in the low-six-figure range. Because the bank sets the loan size, a typical guaranteed facility might be roughly $50,000–$750,000 with VSBFA standing behind up to 75% of it.
- Deadline
- Rolling — applications submitted by the lending bank year-round.
- Status
- active
- States
- Virginia
- Payment model
- loan
Who qualifies
- Must be a small business as defined by VSBFA, located in Virginia
- Must have a participating commercial bank willing to extend the loan or line of credit
- The bank must determine it needs the additional credit support to approve the request
- Must meet the lending bank's underwriting and credit standards
- Loan proceeds must support a legitimate business purpose (working capital, inventory/receivables, or fixed assets)
What it covers
Eligible expenses
- Working capital
- Accounts receivable and inventory financing (lines of credit)
- Equipment and fixed assets (term loans)
Ineligible expenses
- Purposes the lending bank deems ineligible under its own credit policy
- Speculative investments unrelated to the business
How to apply
-
1
Secure a bank willing to lend with a guaranty
Approach your commercial bank about the loan or line of credit you need. If the bank wants additional support to approve it, ask the bank to apply to VSBFA for a Loan Guaranty. The business does not apply directly — the bank initiates.
~4 hrs
-
2
Bank submits the Lender's LGP Application
The bank completes VSBFA's Lender's LGP Application and Guaranty Agreement with the business's financials and the proposed loan structure, and submits to VSBFA.
~3 hrs
-
3
VSBFA review and commitment
VSBFA reviews the package — typically within about a week — and, if approved, issues a commitment. The 1.5% guaranty fee and $200 application fee are charged upon approval and commitment.
~1 hrs
-
4
Loan closes with the guaranty in place
The bank closes the loan or line of credit with VSBFA's deficiency guaranty backing up to 75% of the facility.
~2 hrs
You can't apply directly — bring the program to your banker. A relationship community bank or a Virginia SBDC lender is far more likely to use VSBFA's guaranty than a big national bank. Walk in already knowing the 75%/$1M cap so the loan officer doesn't have to research it.
Deadline & timing
There is no application cycle; the commercial bank submits a Lender's LGP Application when it wants additional credit support to approve a business's loan. VSBFA typically responds within about one week of receiving a complete package.
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