How to Secure a Small Business Loan in Texas

s a small business owner in Texas, there may come a time when you need access to capital to grow or help keep your business afloat through a tough time or to accelerate your business growth during a prosperous one. 

Working capital and steady cash flow are important, not only as a buffer against volatility, but also as a means of facilitating faster business growth. If you want to avoid downsizing or debts and have the ability to expand to new markets, financial assistance may help you with access to much-needed resources. There are several small business loans in Texas and other forms of financial aid such as small business tax credits.

Let’s take a look at the types of loans available and the lenders you can contract for your small business in the state of Texas – and how to qualify.

Texas Small Business Loan Opportunities

As you review the options available, be sure to start pulling together what you may need for an application, such as your business plan, documentation of revenue, and credit score. 

PeopleFund

A nonprofit lender in Texas, PeopleFund provides funding to entrepreneurs in underserved communities, including people of eolor and those who own a small business in a low-income location.

PeopleFund offers different types of Small Business Administration (SBA) programs as well as other loans up to $350,000 with terms up to seven years. Disaster loans are also available for businesses affected by natural disasters, like hurricanes. 

Other benefits of PeopleFund include low down payment amounts, flexible requirements, and no prepayment penalties. 

Business and Community Lenders (BCL) of Texas

BCL is another nonprofit lender in Texas. This nonprofit organization offers assistance to businesses as well as other programs for homeowners and members of the community. If your business is very new or you consider it a startup, this lender may be a good fit for since BCL also offers assistance to small businesses that are less than two years old. Plus, all loan programs come with free business coaching. 

The following is an overview of the loan programs offered by the Business and Community Lenders of Texas:

• Business growth fund: These are loans between $50,000 and $300,000 for businesses established for over two years.
• New business lending: Loans between $20,000 and $50,000 are available for businesses established for two years or less and can be used for purchasing essentials such as real estate, inventory, and equipment. 
• SBA loans: Borrowers may be able to access SBA 504 loans to purchase equipment or real estate.
• Small and diverse growth fund: These are microloans for minority and women entrepreneurs for up to $50,000. 
• Rural business lending: These are USDA loans for up to $250,000 for businesses in qualifying rural communities throughout the state of Texas. 

Texas Capital Bank 

Texas Capital Bank offers loans up to $750,000, which work well for more established businesses or those seeking higher loan amounts. Since the Texas Capital Bank is a traditional bank, they have more stringent qualification requirements, such as several years in business and a strong credit history. 

Texas Capital Bank offers the following business loans:

• SBA loans
• Lines of credit
• Term or installment loans
• Equipment financing
• Trade finance for import-export businesses
• Asset-based financing (uses inventory, equipment, and even accounts receivable as collateral)

Texas Trust Credit Union

In general, credit unions may offer more competitive interest rates and less stringent loan underwriting processes than traditional banks. 

Because you first need to be a member to qualify, Texas Trust Credit Union may be a better fit if you or your business reside in the following counties:

• Dallas
• Denton
• Ellis
• Henderson
• Johnson
• Tarrant
• Tom Green

Texas Trust Credit Union offers various funding options such as term or installment loans, construction financing, real estate loans, lines of credit, and SBA loans.  

Business Investment Growth Austin (BiGAustin) microloans

Though only applicable to specific areas in the state, BiGAustin may be a good choice if you want to get a loan within two to four weeks. For qualifying businesses that have been in operation for at least three months, loans can reach $15,000. Qualifying businesses that have been in operation for at least one year can receive up to $50,000 in loans.

The following is an overview of the qualifying requirements for this microloan. To qualify, your business needs to be located in a qualifying Texas county. It must also be a for-profit business. As a business owner, you must also:

• Have a second income stream, such as a second job or retirement savings.
• Be at least 21 years old and a U.S. citizen or permanent resident.
• Have a written business plan
• Have a minimum 50% interest in the business
• Have general liability and auto insurance
• Be unable to qualify for or afford a traditional bank loan
• Be current on all taxes and have no active bankruptcy

State Grants

On top of loans from private and nonprofit lenders in the state, the following small business grants are also available to qualifying entities in Texas.

Texas Workforce Commission Skills for Small Business grants

The Texas Workforce Commission, or TWC, offers grants for small businesses to help cover the costs of training employees.

Here’s how it works: you’ll work with a local university or college to choose courses you want your employees to take. Then, the Texas Workforce Commission will pay for the cost of the courses. Each new hire can receive get up to $1,800 for courses, while  employees who have worked at your business for more than a year can receive up to $900.  

In order for you to qualify for a grant from the Texas Workforce Commission, the course must focus on at least one of the target industries chosen by the governor of Texas. Most qualifying courses tend to be in science or technology. 

Texas Enterprise Fund grants

The Texas Enterprise Fund, or TEF, offers grants for businesses that choose Texas as the location to open their businesses when the state has been competing with out-of-state locations. The potential downside for startups is that these grants tend to be more common with larger businesses, shopping centers or national franchises. 

To qualify, your business must to create at least 25 full-time jobs if located in a rural area, or 75 jobs at a minimum if located in an urban location. If you do, the grant amounts are usually tied to your business’ employee payroll. 

Texas Department of Agriculture grants

There are several small business grant programs available through the Texas Department of Agriculture, which don’t all require you to work in the agricultural industry either. Some grants include ones for small businesses that help to enhance food safety or nutrition, as well as ones for those developing educational programs having to do with nutrition for children. 

The Takeaway

Texas offers many resources and loan options to help your small business sustain itself as well as grow. And just like in every state, small businesses like yours are essential to support its economic development, so be sure to take full advantage of Texas business loan offers to help meet your business needs and propel you forward. When taking advantage of these types of programs, be sure to check what the eligibility requirements are before submitting an application.

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This page is for informational purposes only and is not intended to be relied upon as legal, financial, or accounting advice. Please consult your own professional if you have any questions.