How to Start a Business in Virginia

To start a business in Virginia you complete six moves in order: pick and register your entity with the Virginia State Corporation Commission (SCC), get a federal EIN from the IRS, register for state taxes with Virginia Tax, secure any local business license (most Virginia cities and counties require a BPOL license), open a dedicated business bank account, and line up working capital before your first slow month arrives. Most of the paperwork can be filed online in a few days; the part that actually decides whether the business survives its first year is cash flow. This guide walks the registration steps and then covers how brand-new and early-revenue Virginia businesses realistically fund inventory, payroll, and growth — including revenue-based financing, where approval leans on your bank deposits and monthly revenue rather than a long credit history.

Step 1: Choose and register your entity with the Virginia SCC

Virginia routes almost every business formation through the State Corporation Commission (SCC) and its Clerk's Information System (CIS) online portal. Before you file, decide on a structure:

• Sole proprietorship / general partnership — no SCC formation filing, but you get no liability protection. If you operate under a name other than your own, you file a fictitious name (DBA) certificate.
• LLC — the default choice for most small Virginia businesses. You file Articles of Organization with the SCC. The state filing fee is modest (for example, around $100).
• Corporation (C or S) — file Articles of Incorporation; typically chosen when you plan to raise outside equity or issue stock.

Every Virginia LLC and corporation must name a registered agent with a Virginia physical address. Once formed, Virginia LLCs owe an annual registration fee to the SCC; corporations owe an annual registration fee scaled to authorized shares. Letting that lapse leads to administrative cancellation, which quietly kills your liability shield — and, later, disqualifies you from most business financing until you reinstate.

Step 2: Get your EIN and register for Virginia state taxes

Once the SCC approves your entity, get a federal EIN (Employer Identification Number) directly from the IRS. It is free, issued instantly online, and required to open a business bank account, hire employees, or make an S-corp election. Ignore any service that charges you for one.

Next, register with Virginia Tax (the Department of Taxation) through its online portal. Depending on what you do, you may need:

• Sales and use tax registration if you sell taxable goods or certain services (Virginia's combined state and local rate is commonly 5.3%, higher in some regions).
• Employer withholding registration if you have employees, plus an unemployment insurance account with the Virginia Employment Commission.

Underwriting note: clean tax registration matters more than founders expect. When a revenue-based funder or lender later reviews you, unresolved sales-tax or payroll-tax liabilities are treated as senior claims on your cash and can shrink or sink an approval.

Step 3: Handle local licensing (BPOL) and industry permits

Virginia has no single statewide general business license. Instead, most cities and counties impose a BPOL tax — Business, Professional and Occupational License — administered by the local commissioner of the revenue. You typically register within a set window after starting operations, and the tax is based on gross receipts once you cross a local threshold. Rates and thresholds vary by locality, so check the specific city or county where you operate.

On top of BPOL, layer any industry-specific credentials: contractors need a license from the Virginia Board for Contractors (DPOR), food service needs local health department permits, and regulated trades (cosmetology, real estate, childcare, etc.) have their own boards. Confirm zoning for a physical location or a home-based business before you sign a lease.

Step 4: Open a business bank account and build a deposit history

Open a dedicated business checking account the moment your EIN is issued. This is not just bookkeeping hygiene — it is the foundation of your future fundability. Revenue-based funders, MCA marketplaces, and banks all underwrite primarily on business bank statements: average daily balance, number and size of monthly deposits, revenue consistency, and how often the account runs negative.

Run every dollar of revenue through that account, avoid commingling personal and business money, and keep the account positive. Three to six months of clean, growing deposits is often the difference between a $10,000 offer and a $40,000 offer. If you are still pre-revenue, this step is what starts the clock.

For a deeper look at how deposits translate into an offer, see our pillar guide on small business funding options.

Step 5: Fund the early months — realistic options for a new Virginia business

Startups and businesses under two years old rarely qualify for bank term loans or SBA loans on day one, so most Virginia founders assemble capital from a stack of sources:

• Personal savings and revenue reinvestment — cheapest capital, but slow.
• Business credit cards — useful for small, recurring expenses; expensive if carried.
• SBA microloans and CDFIs — strong rates for those who qualify, but slower approval and heavy documentation.
• Revenue-based financing / MCA marketplace — the fastest path once you have deposits. Approval is driven by bank deposits and monthly revenue rather than credit score, commonly accepts FICO 500+, starts around $10,000, and can fund in 24-48 hours. Repayment flexes as a share of your sales, which fits seasonal or uneven early revenue.

Revenue-based financing is not the cheapest money — it is the most accessible fast money once real revenue is flowing. Used to cover a specific, revenue-producing need (inventory ahead of a busy season, a piece of equipment, a payroll gap during a growth push), it can pay for itself. Used to plug a structural loss, it accelerates the problem. No responsible funder will call approval 'guaranteed'; it always depends on verifiable deposits and your existing obligations.

Decision framework: when revenue-based financing fits a new Virginia business

Use this to decide whether an early-stage advance is the right tool.

It works best when:

• You already have consistent monthly deposits (typically several thousand dollars a month) but limited time in business or a thin credit file.
• The capital funds something that produces more revenue than it costs — stocking inventory before a peak season, buying revenue-generating equipment, or fulfilling a signed contract.
• You need money in days, not weeks, and can't wait on a bank or SBA timeline.
• Your margins can comfortably absorb a daily or weekly remittance without starving operations.

Avoid it when:

• You are truly pre-revenue with no deposits to underwrite — build a few months of banking history first.
• You would use it to cover ongoing losses or last month's rent with no plan to lift revenue.
• Your margins are so thin that a revenue-share remittance would push the account negative.
• You are stacking a new advance on top of existing advances you are already struggling to service.

Example: how three early Virginia businesses might be underwritten

These are illustrative scenarios, not offers. Figures are labeled for example to show how deposits and revenue drive an approval — not exact-dollar payback math.

The pattern underwriters look for is the same each time: deposits and revenue consistency first, credit score second. A strong score with no revenue rarely funds; modest revenue with steady deposits often does.

Step 6: Set up bookkeeping and stay compliant

From month one, keep clean books — accounting software or a bookkeeper, monthly bank reconciliation, and separate records for sales tax collected. This protects you at tax time and makes you fundable, because funders and lenders can verify revenue quickly when statements and books agree.

Put recurring compliance on a calendar: the SCC annual registration fee, BPOL renewal with your locality, sales-tax and withholding filings with Virginia Tax, and your federal returns. A business that stays in good standing keeps its liability protection and keeps every future financing door open. If you want to compare fast-funding paths as you grow, our overview of business funding options lays out how each source underwrites.