The Best Business Loan And Financing Resources For Texas Small Businesses
We’ve all heard the saying, “Everything’s bigger in Texas.” From ranches to buildings to cowboy hats, this adage applies to many aspects of Texas living. It even applies to opportunities. For small business owners that need capital or other resources, the state of Texas has many great opportunities. Whether you want a quick and easy online loan, a state grant that puts free money into your business, or training and mentorships, there are plenty of opportunities if you know where to look.
We’ve taken the guesswork out of getting a loan in Texas and have done the research for you, compiling a list of loan and financing resources for your small business. New business? No problem! Low personal credit score? We’ve got you covered. From startups to established businesses, these resources can help any Texan achieve your business goals. Read on to learn more.
Table of Contents
- Online Business Lenders For Texas Businesses
- Banks, Credit Unions, & Nonprofit Lenders In Texas
- Small Business Grants In Texas
- Loans & Resources For Startups In Texas
- What To Consider When Choosing A Lender
- Final Thoughts
Online Business Lenders For Texas Businesses
It wasn’t that long ago that one of the only ways to get a business loan was to head to your local bank. Today, you don’t have to step foot into a bank to get the capital you need for your business — thanks to the internet.
Online business lenders are popping up everywhere, offering competitive rates and terms to draw in your business. Not only is working with one of these online lenders quicker than going to the bank and sitting on the phone with your loan officer, but many have more relaxed borrower requirements, making it easier than ever to get the capital you need.
With an online lender, you’re able to apply for a loan online. Most lenders offer up their rates, terms, and borrower requirements right on their website. You can communicate with your lender through email or secure web forms. Some lenders allow you to complete the entire process from application to funding all from the comfort of your home or office — no telephone calls or in-person visits required.
Funding is faster than ever, too. No longer do you have to wait weeks or months for approval. Instead, many online lenders offer instant approvals and funding in as little as 24 hours.
An online search for a small business lender leads to thousands of results, so how do you know which one to choose? Start your funding search with these recommendations.
Who has time to fill out application after application with multiple lenders? Why spend hours trying to connect with the lender that’s right for your business when you can do it all with just one simple application?
With Fundera, you can connect with multiple lenders with just one application. Once you fill out your application, you’ll be connected with a lending specialist who will learn more about your business. Then, your funding specialist will go to work for you to find the best financing options for your business.
You may receive one or even multiple offers. Your lending specialist will work with you to go over the details of your offers, helping you find the best, most affordable financing option. The best part? You receive all of this for no cost!
Fundera has multiple loan options available for your small business, including:
- SBA Loans: Up to $5 million with rates starting at 6.75%.
- Term Loans: Up to $500,000 with rates at 7% to 30%
- Lines Of Credit: Starting at $10,000 with interest rates at 7% to 25%
- Invoice Financing: Up to 100% of invoice value with rates at 8% to 30%
- Startup Loans: Up to $150,000 with rates at 7.9% to 19.9%.
- Equipment Financing: Up to 100% of equipment value with rates at 8% to 30%
- Short-Term Loans: Up to $250,000 with rates starting at 10%
- Merchant Cash Advances: Up to $250,000 with factor rates of 1.14 to 1.18
- Personal Loans For Business: Up to $35,000 with rates at 5.99% to 36%
Borrower requirements vary based on the financial product you select. For example, most borrowers that qualified for a term loan had annual revenue of at least $300,000, a credit score of 680, and a time in business of over 3 years. Borrowers who have qualified for short-term loans had annual revenue of at least $150,000, a credit score of at least 600, and a time in business of over 2 years.
Fundera’s loan specialists will evaluate your business, personal credit history, and other factors to help you select the best product for your situation.
Whether you’re ready to expand your business or you have short-term cash needs, Fundation has a financial solution for you. Through Fundation, you can apply for a term loan or line of credit.
With a term loan, you can pay for an expansion, purchase equipment, or fund capital improvements. You may qualify for up to $500,000 with repayment terms up to 4 years. APRs range from 8.99% and 29.99% and payments are made twice per month.
Fundation’s lines of credit are available in amounts up to $150,000 with terms up to 18 months. APRs range from 8.99% and 29.99% and are based on the creditworthiness of the borrower. Payments are made once per month.
To qualify for a Fundation financial product, you must meet the following requirements:
- Time in business of at least 3 years
- Annual revenue of at least $100,000
- Good personal credit
Qualifying for a traditional bank loan is tough. Luckily, the Small Business Administration has lending programs that make it easier for startups and small businesses to qualify for low-interest, long-term loans. Because the SBA guarantees a portion of loans distributed through its programs, lenders feel more confident in lending to small business owners, even those with less-than-perfect credit scores or who have just launched their businesses. The SBA is not a direct lender. Instead, small business owners turn to intermediary lenders to get the funds they need – lenders like SmartBiz.
SmartBiz simplifies the SBA loan process, helping small business owners in Texas move quickly and easily through the process. Through SmartBiz, you have two SBA loan options: SBA working capital and debt financing loans or SBA 7(a) commercial real estate loans.
SBA working capital and debt refinancing loans are available in amounts from $30,000 to $350,000. Funds can be used to purchase equipment or inventory, refinance existing debt, pay for a marketing campaign, or just for working capital purposes. Interest rates are between 8.25% and 9.25% with maximum repayment terms of 10 years.
To qualify for this SBA loan, you must:
- Have a time in business of at least 2 years
- Be a U.S. citizen or legal resident
- Have a personal credit score of 640 or higher
- Have sufficient cash flow to pay your loan
- Have no bankruptcies or foreclosures within the last 3 years
- Have no outstanding tax liens
- Have no previous defaults on government-backed loans
If you want to purchase commercial real estate or refinance your existing commercial mortgage, you could qualify for $500,000 to $5 million through the SBA 7(a) program. Interest rates are 7% to 8.25% through SmartBiz with repayment terms up to 25 years.
To qualify, you must meet these requirements:
- Use funds for a property that is at least 51% owner occupied
- Time in business of at least 3 years
- U.S. citizen or legal resident
- Personal credit score of 675 or higher
- Have sufficient cash flow to pay your loan
- Estimated purchase price must be higher than $500,000
- No bankruptcies or foreclosures within the last 3 years
- No previous defaults on government-backed loans
- No outstanding tax liens
Funds through this loan program can’t be used to purchase investment properties or fund the costs of new construction.
If you’re not ready to apply for a loan through SmartBiz’s SBA programs, the company has also teamed with lender partners to offer affordable, long-term bank loans up to $350,000 for qualified borrowers.
Haven’t been in business for long or have a low credit score? Don’t worry – there are options available for you. One of those options is LoanBuilder. Through this online lender, you can “build” your own loan, personalizing your loan using the LoanBuilder Configurator.
With LoanBuilder, you can receive $5,000 up to $500,000 to build your business. Repayment terms are 13 to 52 weeks, with weekly payments debited directly from your business bank account. LoanBuilder makes it easy to understand the cost of borrowing by charging a one-time fee. This fee is 2.9% to 18.72% of the borrowing amount and is added into your loan. There are no additional fees for receiving a LoanBuilder loan.
To qualify for a LoanBuilder loan, you must have:
- A time in business of at least 9 months
- At least $42,000 in annual revenue
- No active bankruptcies
- A U.S.-based business
- Personal credit score of 550 or above
You must also be in an eligible industry to qualify. Most industries will qualify, but some that are excluded include attorneys, collection agencies, schools, gambling businesses, auto dealers, and non-profit organizations.
If you don’t qualify for a loan through a bank or other traditional lender, OnDeck is another lender with minimum requirements that can give you the capital you need. Through OnDeck, you have two financial products to choose from: term loans and lines of credit.
With OnDeck’s term loans, you can receive up to $500,000. The lender offers two loan options: short term loans and long term loans. Short term loans have repayment terms of 3 to 12 months and can be used for purchases that have immediate returns, such as launching a new marketing campaign, hiring new employees, or purchasing inventory.
OnDeck’s short term loans have a simple interest rate as low as 9%. This means that the interest rate is a percentage of your borrowing amount. For example, if you have a $10,000 loan with a 9% simple interest rate, you’ll repay $10,900. Additional fees may apply.
OnDeck’s long term loans have terms of 15 to 36 months and can be used to expand your business, purchase equipment, or develop new products. These loans come with an annual interest rate starting at 9.99%.
All term loans have an origination fee of 0% to 4% of the loan amount. Payments are made daily or weekly and are automatically deducted from your business bank account.
To qualify for term loans through OnDeck, you must have:
- Time in business of at least 1 year
- At least $100,000 in annual revenue
- Personal credit score of 600 or above
OnDeck also provides lines of credit up to $100,000 for qualified borrowers. The APR starts at 13.99%. Repayments are made weekly and are automatically deducted from your business bank account. OnDeck’s lines of credits do not have draw fees. However, there is a $20 monthly maintenance fee. This fee can be waived by drawing at least $5,000 within 5 days of opening your account.
To receive an OnDeck line of credit, you must meet these requirements:
- Time in business of at least 1 year
- At least $100,000 in annual revenue
- Personal credit score of 600 or above
If a flexible line of credit would work best for your financial needs, consider applying with Kabbage. Through Kabbage, you can get up to $250,000 as a line of credit to use for your business. Funds can be used for any business purpose, from expansion to hiring new employees to filling gaps in revenue during a slow season.
Kabbage lines of credit come with terms of 6 or 12 months. Kabbage charges monthly fees of 1.5% to 10%, and your rate is based on the performance of your business. If you pay off your balance early, remaining fees will be waived so you can save money on your loan. Repayments are made monthly and are automatically debited from your business checking account.
Kabbage bases its approval decisions on the performance of your business, not just your personal credit score. To qualify, you must meet the following minimum requirements:
- Time in business of at least 1 year
- At least $50,000 in annual revenue OR at least $4,200 per month for the last 3 months
One thing that makes Kabbage stand out from other lenders offering lines of credit is the Kabbage Card. You can make a regular draw from your line of credit, which you receive in your bank account within 1 to 3 business days. Or you can get instant access to funds with the Kabbage Card. Simply use the card anywhere credit cards are accepted to make an immediate purchase. Once you’ve used your card, Kabbage will create a new loan with the same rates and terms as traditional draws.
Some of the options already discussed work for more established businesses, but what if you haven’t yet opened your doors? As a new business owner, meeting the requirements for a business loan can be a challenge, even through alternative lenders. If you have at least a fair credit score, one option to consider is a personal loan for business through a lender like LendingPoint.
With LendingPoint, you can receive a loan up to $25,000. Repayment terms for LendingPoint loans are 24 to 48 months. Interest rates start at 15.49%.
Because this is a personal loan, time in business, business credit history, and annual revenues are not requirements for approval. Instead, you must meet these requirements:
- Be at least 18 years old
- Have a valid social security number
- Have at least $20,000 in annual income
- Have a verifiable bank account
- Have a credit score of at least 585
Banks, Credit Unions, & Nonprofit Lenders In Texas
If you’d rather work with a more traditional lender for your small business loan, Texas has plenty of banks, credit unions, and nonprofit lenders to choose from, including these picks.
Security Service Federal Credit Union
Security Service Federal Credit Union is one of the largest credit unions in Texas with nearly 70 locations across the state. Branches are located in cities including San Antonio, Corpus Christi, Portland, and New Braunfels.
There are multiple small business financing options available through this credit union. Your options include:
- Commercial Mortgages
- Commercial Construction Loans
- Capital Improvement Loans
- Vehicle & Equipment Financing
- Term Loans
- Lines Of Credit
- Business Credit Cards
The rates, terms, borrowing limits, and borrower requirements are based on the product you select. This institution also offers merchant services, payroll services, and business checking and savings accounts.
To become a member of Security Service, you must meet one of the following requirements:
- You live, work, worship, attend school, volunteer, or own a business located in the state of Texas
- You’re a member of the military or are employed by the Department of Defense living in the service area
- A family member or someone in your household is a member of the credit union
If you want to stick with a traditional lending institution, Wells Fargo is one of the largest banks in Texas. Wells Fargo branches are located all throughout the state in cities including Wichita Falls, Fort Worth, Austin, and Houston.
Wells Fargo offers a variety of small business products and services to its customers. This includes:
- Secured & Unsecured Business Credit Cards
- Unsecured Business Loans: $10,000 to $100,000 with rates starting at 8.25% and terms up to 5 years
- Equipment Loans: $10,000 to $100,000 with rates starting at 7% and terms up to 5 years
- Term Loans: $100,000 to $500,000 with terms up to 1 year
- Lines Of Credit: Up to $500,000
- Commercial Real Estate Loans: Up to $1 million
- Commercial Real Estate Refinancing: Up to $1 million
- Commercial Real Estate Equity Loans: Up to $500,000
- Commercial Equity Lines Of Credit: Up to $500,000
- SBA 7(a) Loans: Up to $5 million
- SBA 504 Loans: Up to $6.5 million
Borrower requirements vary based on the financial product you select. Additional business products and services include business bank accounts, merchant services, and payroll services. To learn more about opening an account, you can sign up online or visit your local Wells Fargo branch.
LiftFund specializes in providing small business loans to businesses that don’t qualify for traditional bank financing. Through LiftFund, you may be eligible to borrow $500 up to $1 million. LiftFund also is a Certified Development Company that administers SBA 504 loans. Borrowers may also qualify for up to $250,000 through the SBA 7(a) program.
To qualify for a loan, LiftFund considers the following:
- Ability to repay
- Personal character
- Commitment to improving business and personal credit
- Good payment history with other creditors
- Alternate sources of income
- No Chapter 7 bankruptcies within 2 years
- No Chapter 12 bankruptcies within 1 year
The average borrower has a personal credit score of 575. The lender works hard to match business owners with a loan regardless of credit history, time in business, or annual revenues.
BCL Of Texas
Through BCL of Texas, you can receive up to $50,000 with the Texas Small & Diverse Growth Fund. This loan program is open to minority and women-owned businesses. To apply, you must have a one-on-one consultation with a BCL specialist and complete a Financial Readiness Assessment. Once these two steps are complete, you can apply for loans between $5,000 and $50,000. Through this program, you can also receive business coaching for the life of your loan at no additional cost.
BCL also offers new business loans of $20,000 to $50,000. Loan funds can be used for working capital, real estate purchases, equipment purchases, or as a line of credit. A loan inquiry can be submitted through the BCL website to learn more.
As your business grows, BCL offers additional loan options. The Business Growth Fund provides up to $300,000 for the purchase of real estate or machinery, working capital, or to refinance existing debt. Rural business loans up to $250,000 are also available through BCL. SBA 504 loans are also available through this lender.
Small Business Grants In Texas
If you don’t want to be stuck repaying a loan plus interest and fees, a small business grant could be what you need for your business. A small business grant is money that doesn’t have to be repaid. Unfortunately, competition for these grants is stiff. Plus, many small business grants have very specific requirements that your business might not meet. However, it never hurts to apply for grants that you are qualified to receive. In the state of Texas, there are several grants available to small businesses. Read on for some of the top options to consider.
Texas Workforce Commission Skills For Small Business Program
The Texas Workforce Commission (TWC) Skills for Small Business Program provides grants for training new employees. With these funds, small business owners can pay for employee training at their local community college, tech college, or Texas A&M Engineering Extension Service.
Through the program, businesses can receive up to $1,800 per year for each new employee that receives training. Existing employees can receive up to $900 per year for training.
To qualify, businesses must have fewer than 100 employees. Only full-time employees are eligible to receive training. All wages for employees must meet or exceed the prevailing wage in the area where the business is located.
To apply, you must complete and submit the TWC application by fax or through email.
Texas Enterprise Fund
The Texas Enterprise Fund awards “deal-closing” grants to businesses that are competing with out-of-state sites for a project. Projects may include opening or expanding a business.
In addition to having at least one out-of-state competitor, qualifying businesses must also plan to create more than 75 full-time jobs in urban areas or more than 25 in rural areas. The average wage for new jobs must meet or exceed the average county wage. Qualifying businesses must also show significant planned capital investment and must be financially sound.
All businesses must submit an application packet and then undergo an 11-step screening process. Once completed, the Governor, Lieutenant Governor, and Speaker of the House review applications and must unanimously agree in order for the grant to be awarded.
Texas Department Of Agriculture
The Texas Department of Agriculture has several loan and grant programs for businesses in and outside of the agriculture industry. Programs include the Agricultural Loan Guarantee Program, Specialty Crop Block Grant Program, and Capital for Texas. Requirements and deadlines vary based on the program you select. All information and applications can be found on the Texas Department of Agriculture website.
Loans & Resources For Startups In Texas
Many startup businesses seek outside financing and resources in order to increase their chances for success. In the state of Texas, there are multiple resources to consider that provide financing opportunities, mentorships, and much more to help you more effectively start and build a business.
SCORE, a resource partner through the Small Business Administration, offers free business mentors to small business owners across the nation. Through SCORE, not only will you connect with an experienced business mentor, but you can also take advantage of other resources including workshops, webinars, and business courses.
There are multiple SCORE offices throughout the state of Texas in cities including Austin, Dallas, Houston, and San Antonio. You can contact your local SCORE office to find out more about the resources available to you, or you can visit the SCORE website to connect with a mentor, check out webinars, and more.
The Governor’s Small Business Workshops
Through the Office of the Governor, small business owners can participate in Small Business Workshops held throughout the year all throughout the state of Texas. These workshops cover a variety of business topics including startup essentials, access to capital, and business opportunities for women, minorities, and veterans.
America’s Small Business Development Centers
New and existing business owners can take advantage of the resources offered through Small Business Development Centers (SBDC). Through SBDC, you can receive free business consulting and low-cost training across multiple business topics including accessing capital, tech development, marketing, and more.
There are over 60 business centers located throughout Texas. You can locate your local office through the SBDC website to learn more about the opportunities available
What To Consider When Choosing A Lender
Still on the fence about which lender to choose? Doing your homework and weighing out your options is a smart move. However, if you’ve done your research and you still can’t seem to nail down a lender, ask yourself the following questions:
How Much Money Do I Need?
Your financing application will require you to request an amount of money to borrow, so make sure you know how much capital your business needs. Knowing how much money you need can also help you narrow down your selection of lenders. Let’s say you need $200,000 for an overhaul of your business. Lenders that have lower maximum limits can be immediately marked off your list.
How’s My Credit Score?
Got bad credit? The bad news is that you may not qualify for certain types of financing, such as a traditional bank loan. The good news is that there are alternative loan options available to borrowers with poor scores or no credit. However, be aware that these products often come with higher fees and interest and shorter terms than options available to more creditworthy borrowers.
If you’re unsure of where you stand in terms of credit, pull your free credit score before applying for financing. Then, apply only to lenders with credit score requirements you can meet. If your score is low and your funding need isn’t urgent, consider evaluating your credit report to determine your weak points. Then, take steps to boost your score, which will open up new financing options with improved rates and terms.
Do I Meet All Other Requirements?
Most lenders look at more than just your credit score. Some lenders consider factors such as time in business, annual revenues, debt-to-income ratios, and even the size of your business and the number of employees you have. Make sure you meet all borrower requirements before submitting your application. Remember, if you don’t meet all of one lender’s requirements, there are plenty of other lenders willing to work with your business.
How Will I Use My Funds?
How do you plan to use the capital you receive from a lender? Some lenders impose restrictions on how funds are used. For example, an equipment loan must be used to purchase equipment or fixtures. You can’t use these funds to hire employees or cover payroll. Choose a lender that offers a financial product that works for your business needs. Then, ensure that there are no restrictions that would prevent you from using your capital in a way that’s best for your business.
Whether you have an established business or you’re gearing up for your grand opening, there are plenty of resources in the state of Texas to help your small business. Do your research, calculate the affordability of any loan you pursue, and make sure your next steps will only better your business.