Revenue based financing for Virginia businesses
Merchant cash advance in Virginia
Virginia was one of the first states to regulate merchant cash advances directly. Providers and brokers must register, give you signed disclosures, and keep confessions of judgment and out-of-state court clauses out of your contract.
How merchant cash advances work in Virginia
A merchant cash advance works the same way in Virginia as anywhere else: a funder buys a share of your future sales for a lump sum today. What changes by state is what the funder must tell you before you sign.
You receive funding up front and repay a fixed total amount through daily or weekly debits, or a percentage of card sales. Because an MCA is usually structured as a purchase of receivables rather than a loan, it is priced with a factor rate instead of an interest rate. See how factor rates and total cost work.
Virginia is one of a growing number of states with its own commercial financing law. Knowing what that law requires helps you read an offer, spot missing information, and compare funders on equal terms.
Virginia rules for merchant cash advances
| Rule | What it means for you |
|---|---|
| Law | Code of Virginia, Title 6.2, Chapter 22.1, sales-based financing (sections 6.2-2228 to 6.2-2238) |
| Who it covers | Sales-based financing providers and brokers dealing with businesses whose principal place of business is in Virginia, including online |
| Amount covered | Single transactions of $500,000 or less |
| Common exemptions | Financial institutions, and providers with no more than five transactions with a recipient in a 12-month period |
| Registration | Providers and brokers register with the State Corporation Commission (initial deadline November 1, 2022) |
| Enforcement | The Attorney General may seek injunctions, restitution, and damages; contract terms that violate the law are unenforceable against you |
Summary for general information; see the Code of Virginia in the sources below for exact requirements.
What your offer must show you
Virginia disclosures, given with a specific offer and signed by you when you accept, must show:
- The total amount of financing and the disbursement amount after fees
- The finance charge and the total repayment amount
- The estimated number of payments to repay, based on projected sales
- The payment amount, frequency, and method, or how variable payments are calculated
- All other potential fees, such as draw, late, returned-payment, and prepayment fees
- Your prepayment policy, including any added fees or discounts
- Any collateral requirements or security interests
- Whether the provider pays a broker, and how much
How to use the disclosure to compare offers
Virginia's disclosure does not require an APR, so compare offers on the amount you will receive, the finance charge, the total repayment, and how many payments it should take. Check the broker compensation line too: it tells you how much of your cost goes to whoever arranged the deal.
| Disclosure line | Hypothetical offer |
|---|---|
| Funding amount (total financing) | $50,000 |
| Fee withheld at funding | $1,500 |
| Amount actually deposited (disbursement) | $48,500 |
| Total repayment (1.30 factor) | $65,000 |
| Payments | About $344 per business day for about 9 months |
| Finance charge | $16,500 |
| Estimated APR (not required in Virginia) | About 82% at this pace |
Hypothetical example for illustration only, not an offer.
Convert any offer to an estimated APR with the MCA calculator.
Contract terms Virginia law makes unenforceable
Beyond disclosure, Virginia limits several contract terms that have caused problems for small businesses.
- Out-of-state courts: a provision requiring legal actions to be brought outside Virginia is unenforceable.
- Distant arbitration: requiring face-to-face arbitration outside your area is unenforceable, and in arbitration under these contracts the provider pays the arbitrators' fees and expenses.
- Confessions of judgment: a confession of judgment provision is unenforceable.
- Registration: sales-based financing providers and brokers must register with the State Corporation Commission. Ask any funder or broker whether it is registered.
Typical MCA requirements for Virginia businesses
State law sets disclosure rules, not approval rules. Funders weigh the same factors everywhere.
- Time in business: often 6+ months; some programs review from 3 to 4 months
- Monthly deposits: often $10,000+ in true business revenue
- Bank activity: regular deposits and few or no negative days or returned items
- Existing advances: disclosed, and not already taking a large share of deposits
- Credit: mid-600 profiles commonly considered; some files below 600 reviewed
Typical ranges, not promises; each funder sets its own minimums. See the full MCA requirements checklist and the document checklist.
Related guides and tools
Frequently asked questions
Q01Do merchant cash advance providers have to register in Virginia?
Yes. Sales-based financing providers and brokers must register with the State Corporation Commission under Chapter 22.1 of Title 6.2 of the Code of Virginia, unless an exemption applies.
Q02What must a Virginia MCA disclosure include?
The total financing and disbursement amounts, finance charge, total repayment, estimated number of payments, payment details, other fees, prepayment policy, collateral or security interests, and any broker compensation. You sign the disclosures when you accept the offer.
Q03Are confessions of judgment allowed in Virginia MCA contracts?
No. Virginia makes confession of judgment provisions, out-of-state court requirements, and distant face-to-face arbitration requirements unenforceable in sales-based financing agreements.
Q04Do Virginia MCA disclosures include an APR?
No. Virginia requires dollar-based disclosures, including the finance charge and total repayment, but not an APR. You can estimate one with an MCA calculator.
Q05What size of financing does Virginia's law cover?
Single sales-based financing transactions of $500,000 or less, for businesses whose principal place of business is in Virginia.
Q06Is SmallByzLoans a lender?
No. SmallByzLoans is a funding marketplace. We match you with funding providers, and the provider makes the decision and provides the required disclosures.
Sources and further reading
- Code of Virginia, Chapter 22.1, Sales-Based Financing Providers, Virginia Legislative Information System
- Business guidance for small businesses, Federal Trade Commission
Financial disclaimer: This page is general information about Virginia law as of October 2026, not legal, financial, or tax advice. Laws and regulations change; confirm current requirements with the regulator or an attorney. SmallByzLoans is a funding marketplace, not a lender. Approval, amounts, and terms are set by each funding provider.
Compare MCA offers for your Virginia business
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