sudo dd if=/dev/zero of=VHD.img bs=1M count=1200
sudo mkfs -t ext4 /media/VHD.img
sudo mkdir /mnt/VHD/
sudo mount -t auto -o loop /media/VHD.img /mnt/VHD/
or xfat:
sudo mkfs.exfat /media/VHD.img
or hfs+
sudo mkfs.hfsplus /media/VHD.img
or Fat32
sudo mkfs.vfat /media/VHD.img
Append 500MB to the end
sudo dd if=/dev/zero bs=1M count=500 >> VHD.img
Then resize (after unmounting)
sudo resize2fs VHD.img
resize2fs VHD.img 800M
sudo truncate -s 800M VHD.img
You can't resize an exfat file system so you will need to recreate the exFAT filesystem in the rezied image (requiring moving the files out of the image and putting back again