Funding & Competitions
Getting Started
To secure financing for your business, start at the beginning: how much money do you need and for what?
- Counselors at your local Small Business Development Center can help estimate your financial needs for both startup and expansion.
- The U.S. Small Business Administration (SBA) offers some tips on estimating startup costs.
- Bplans.com has an online startup costs calculator.
Loudoun Innovation Challenge
The goal of the Innovation Challenge is to promote entrepreneurship and business growth by identifying and supporting companies that are developing truly innovative products and services in Loudoun County.
Types of Funding
Funding for startup and growing businesses often depends on your stage of business and the amount of money you need. The Business Owner’s Toolkit offers an overview of business financing and their Quick Pick chart identifies funding sources based on your stage of business.
You know how much money you need and the most likely funding source. Now get more information about loans, grants, and other business financial resources. Click to expand each of the sections below.
Loans
Commercial Bank Loans
Commercial bank loans don’t require entrepreneurs to turn over equity or company control. In general, banks prefer to make loans of more than $10,000. Banks like to see:
- Good personal credit
- A solid business plan
- Ability to repay the loan
- Collateral
Once you’ve determined that an Small Business Administration (SBA) or traditional bank loan is the right kind of financing for your business, you’ll need to package your financial information in a way that makes it easy for a banker to make a favorable decision. At the most basic level, you will need to provide:
- Basic information about your business
- Basic information about the loan you are requesting
- Financial information about your business
We highly recommend that you work with the Loudoun Small Business Development Center at MEC. The SBDC is skilled in helping business owners prepare themselves to approach funding sources.
Types of Loans
Line of Credit is an arrangement in which a bank extends a specified amount of credit to a specified borrower for a specified time period. A line of credit is best suited to help cover expenses that tend to fluctuate throughout the course of a year.
Home equity loans are a cost-effective alternative to other types of loans because they offer good interest rates available. But you may not want to risk your family home to launch your business venture.
Equipment lease financing gives you access too many types of equipment: computers, copiers, vehicles, etc. without tying up your cash or credit lines. Although it doesn’t bring in cash, leasing reduces the amount of cash you otherwise have to raise to start.
Cash advances from credit cards are an easy and quick way to gain access to cash. But as a long-term financing method, they can be expensive– credit card interest rates typically run much higher than rates you would likely pay on a bank loan.
Factoring allows a company to “sell” its accounts receivables to an outside company at a discounted rate. This allows the company to receive funds immediately to fund operations and ease cash flow. This is common for government contracts.
The U.S. Small Business Administration (SBA) offers a variety of loan programs for very specific purposes. Each program will have its own eligibility criteria and application process.
- General Small Business Loans (7a)
- Microloan Program
- Real Estate & Equipment Loans: CDC/504
- Disaster Loans
Connect with approved SBA lenders using the online SBA tool LINC or contact Loudoun County’s Small Business and Entrepreneurship Manager for information on the community banks in Loudoun County.
Grants
The Value-Added Producer Grant (VAPG) program helps agricultural producers enter into value-added activities related to the processing and marketing of new products. The goals of this program are to generate new products, create and expand marketing opportunities and increase producer income.
You may receive priority if you are a beginning farmer or rancher, a socially-disadvantaged farmer or rancher, a small or medium-sized farm or ranch structured as a family farm, a farmer or rancher cooperative or are proposing a mid-tier value chain.
Independent producers, agricultural producer groups, farmer- or rancher-cooperatives, and majority-controlled producer-based business ventures, as defined in the program regulation, are eligible to apply for this program. Online applications are must be received by 11:59 p.m. ET on April 29, 2021. Paper applications must be postmarked by May 4, 2021.
Worth up to $4,000 each, NASE Members can apply for small business grants. Small business grants are useful for financing a particular small business need. Past recipients used their growth grants for computers, farm equipment, to hire part-time help, marketing materials, website creation and more.
Growth Grant applicants must be a NASE member in good standing for three months prior to submitting an application (annual members may apply immediately. Monthly members may apply 90 days after joining the NASE.) Read more.
The Rural Business Development Grants program is designed to provide technical assistance and training for small rural businesses. Small means that the business has fewer than 50 new workers and less than $1 million in gross revenue.
Check your business address for eligibility and learn more about the application process on the website.
Small businesses can access free valuable resources as well as apply to receive a $10,000 grant until May 12, 2023. Learn more here: Verizon Small Business Digital Ready opens new round of grant funding | About Verizon
There are many grant opportunities available for small businesses in the federal sector. A good source to get started includes Grants.gov, a central information storehouse on more than 1,000 federal grant programs totaling approximately $500 billion in annual awards.
Small Business Innovation Research
Small Business Innovation Research and Small Business Technology Transfer grants fund research and development efforts of a high risk nature that may have excellent commercial potential.
Apply for SBIR grants if your small business will be engaged in federal R&D, with the potential for commercialization. SBIR grants are offered by agencies such as the National Institutes of Health*, the Department of Defense and the National Science Foundation.
Small Business Technology Transfer
STTR grants are designed to facilitate cooperative R&D between small businesses and U.S. research institutions, where the outcome has the potential for commercialization. If you are collaborating with a non-profit university or federal lab, you may qualify to apply for SBTT grants from federal agencies such as NASA, the Department of Education, or the Department of Health and Human Services.
Other Grants
Unfortunately, most grants are for nonprofit organizations, not small businesses. Be very careful of advertisements promoting “free money for your business.” These ads can be very misleading, often suggesting that you can receive a list of many grant sources for a fee of a few hundred dollars.
Use the federal government’s free, official website, Grants.gov rather than commercial sites that may charge a fee for grant information or application forms. Grants.gov centralizes information from more than 1,000 government grant programs to help states and organizations find and apply for grants.
Other Financial Information
Angel funding and venture capital
Angels provide seed money to business startups—to the tune of tens of thousands to a million dollars or more—in exchange for convertible debt or ownership equity. Some angel investors come together to form angel groups or angel networks to share research and pool investment dollars.
Venture capitalists (VC), on the other hand, usually make their capital investments later in the business cycle. They exchange their investment and their expertise for a significant portion of the company’s ownership and significant control over company decisions.
Before you approach an angel investor, angel network, or VC firm, ask yourself and your partners these questions:
- Am I willing to give up some amount of ownership and control of my company?
- Can I demonstrate that my company is likely to realize significant revenues and earnings in the next three to seven years?
- Can I demonstrate that my company will produce a significant return for investors?
- Am I willing to take the advice from investors and accept board of director decisions I may not always agree with?
- Do I have an exit plan for the company that may mean I’m not involved?
You’ll need to follow those answers with a solid business plan and an executive summary that includes:
- Financial overview for at least three years out
- Sales and marketing plans
- Three-to-five year goals and your action steps to get there
- Exit strategy
Small Business Investment Company
SBIC works to stimulate the national economy and small businesses by supplementing the flow of private equity capital and long-term loan funds for the sound financing, growth, expansion, and modernization of small business operations while insuring the maximum participation of private financing sources.
Find a list of Virginia SBIC programs on the Small Business Administration website.
Gust
Gust provides a listing of many angel groups across the country. You can also use the site to submit your business plan for review.
The Virginia Small Business Financing Authority (VSBFA) is the Commonwealth of Virginia’s business and economic development financing arm. Aligned within Virginia’s Department of Small Business and Supplier Diversity, the VSBFA offers programs to provide businesses, not-for-profits, and economic development authorities with the financing needed for economic growth and expansion throughout the Commonwealth
Industrial Development Bond Programs- 501 (c) 3 Tax-Exempt Bond Program
- SSBCI Capital Access Program
- Loan Guaranty Program
- Cash Collateral Program
- Economic Development Loan Fund
For more information on these program connect with the VSBFA using their main number at: 804-371-8254
According to the SBA the most active SBA 7(A) lenders are listed here.
Many major banks have dedicated pages in regard to small business financial services. will be updated as more information becomes available: