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Best Small Business Loans in Texas

Texas is one of the best states to start your own company due to its robust zoning laws, an easy licensing process, and the deregulated economy. This article takes a closer look at numerous options for small business loans in Texas.

Written by Tetiana Sitiugina-Babiuk - Independent writer and content strategist, updated on 9/10/2021

At a glance Around 2.6 million small businesses operate within the borders of Texas. It isn’t surprising since Texas is the second-largest state in the United States, and it has plenty of space for your own small business. Texas entrepreneurs can expect to receive an average of $65,093 from financial lenders, and such a loan could go a long way in helping you start and expand your small business.

Top 5 Texas Small Business Loan Options

Let’s take a look at the top 5 options for small business loans in Texas that local entrepreneurs could benefit from.

1. Texas Capital Bank

Texas Capital Bank is an incredibly convenient lender to apply for a small business loan in Texas, as the bank has branches in all major cities of the state. In addition, Texas Capital Bank provides loans of quite significant value, which can amount to up to $750,000.

The bank offers term loans and SBA (Small Business Administration) loans, trade finance for export and import business, lines of credit, and equipment financing. They also provide additional financing for companies operating in hard-to-fund industries like brokering, real estate, or gas and oil. Finally, Texas Capital Bank offers asset-based funding, which means that your loan will be collateralized by your equipment, business inventory, and accounts receivable.

However, keep in mind that this is a bank. As such, you can expect stricter qualification and credit requirements as compared to loans from non-profit organizations.

2. Business and Community Lenders of Texas

Business and Community Lenders (BCL) of Texas present a Texas-based non-profit organization. The main goal of BCL is to provide lending, entrepreneurship, homeownership, and community development assistance throughout the state.

Business and Community Lenders offer many various loan programs, which make it possible for you to find the right option for your company and its needs. Some of the loan programs offered by BCL include:

  • Rural Business Lending: BCL has partnered with the US Department of Agriculture in order to offer small business loans of up to $250,000 for businesses located in rural towns across Texas (towns with a population of 50,000 or less).
  • New Business Lending: this lending option was created to support new businesses that have been in operation for two years or less. The loan provided can range between $20,000 and $50,000 and can be used to purchase inventory, equipment, or other business essentials.
  • Business Growth Fund: this loan program is for you if your small business has been in operation for over two years. With this option, you can expect to receive a loan ranging from $50,000 to $300,000.
  • Small and Diverse Growth Funds: this loan program was created specifically for women and business owners from minority groups. If you qualify for this option, you can apply for a micro-loan of up to $50,000.
  • SBA Loans: BCL has partnered with the US Small Business Administration to offer 504 small business loans to assist entrepreneurs in purchasing real estate or equipment.

3. PeopleFund

PeopleFund is a non-profit organization that works to provide assistance for small businesses operating in underserved communities. This includes businesses owned by veterans, people of color, women, or companies located in low-income areas.

Some major benefits of obtaining a Texas small business loan from PeopleFund include:

  • No prepayment penalties
  • Lower down payments
  • Flexible collateral and underwriting requirements
  • Group and one-on-one business training

In addition, PeopleFund takes part in Small Business Administration programs. They offer loans of up to $350,000, with a repayment period of up to seven years. The organization’s interest rates lie between 7% and 15%, with additional discounts for small business owners representing underserved communities as described above.

4. Business Investment Growth Austin Microloans

Business Investment Growth Austin Microloans (BiG Austin) is a microlender providing small business loans to several different communities within Texas. To apply for a loan with this lender, your company needs to be located within the borders of one of the following counties: Bastrop, Bell, Blanco, Burnet, Hays, Lampasas, Lee, Llano, Gillespie, Mason, McCulloch, Milam, Travis, or Williamson.

If your small business has three or more months of trading history, you are eligible to apply for a loan of up to $15,000. On the other hand, if your business has been in operation for one or more years, you can apply for a loan of up to $50,000. The BiG Austin’s repayment terms can range between one and six years.

Keep in mind that, for new small businesses, BiG Austin requires that the business owner has an additional income source like retirement income, spousal income, or a second job.

5. Texas Trust Credit Union

Many times, business loans from credit unions are overlooked, as you must be a credit union member in order to apply for a loan. However, such loans often offer advantages of a more flexible underwriting process and more competitive interest rates.

If your company is located in Dallas, Denton, Tarrant, Ellis, Tom Green county, or Johnson, you can apply to become a member of the Texas Trust Credit Union.

The union provides SBA loans, term loans, construction financing, lines of credit, and even real estate loans, - all of which can be incredibly beneficial for real estate and property developers. You can also apply for a cash-back business credit card if you need assistance with your ongoing business purchases.

Summary of Top 5 Texas Small Business Loan Providers

Loan Provider

Maximum Loan Amount

Repayment Term

% Interest

Business and Community Lenders of Texas

$300,000

1-7 years

5.5% - 9.75%

Texas Capital Bank Small Business Loans

$750,000

1-7 years

5.5% - 9.75%

PeopleFund

$350,000

7 years

7%-15%

Texas Trust Credit Union

$350,000

1-7 years

5.5% - 9.75%

Business Investment Growth Austin Microloans

$50,000

1-6 years

5.5% - 9.75%

Top Online Texas Small Business Loan Options

When looking for small business loans in Texas, don’t limit yourself to considering local options alone. If you aren’t able to find a local provider that can help you with your needs (or you don’t meet their requirements), it is worth taking a look at online loan providers.

1. Fundbox - Best for Lines of Credit

Fundbox presents a great alternative for small business owners with low credit scores who aren’t able to obtain a loan from other institutions. While most other lenders require a minimum credit score of 650 to qualify, Fundbox only requires a minimum score of 500.

In addition, Fubdox offers an easy and quick application process. All you need to do is register your business and link your accounting software with the Fundbox platform. Once approved, you will often be able to receive the funds as quickly as the next business day, which is an attractive benefit for businesses in a financial pinch.

2. Fundera - Best for Startup Loans

If you are looking for a small business loan in Texas but don’t have the time to research and evaluate the various options available, consider applying for a loan with Fundera. The company operates as an introducer to the different loans you can qualify for offered by other lenders. So, when you get approved, keep in mind that the funds will not come from Fundera directly, but rather from these other lenders.

Fundera is also useful for new start-ups who do not have previous years’ accounts or a track record to support their application. Because Fundera has already established relationships with its partners, they can negotiate the best possible deals on your behalf.

3. OnDeck - Best for Commercial Mortgages 

OnDeck is an online lender specializing in small loans between $5,000 and $500,000 to cover most of your business’s needs. In addition, OnDeck is known for its rapid service: you can expect to hear back about your application’s status very quickly, sometimes within 24 hours. Once approved, you will receive the funds within several days.

OnDeck also offers great flexible plans that can accommodate your business needs and dedicated customer support to make the process smooth and effortless.

Top Financial Grants for Small Businesses in Texas

Sufficient financial capital is a must for any small business to grow into a successful company. If you are running short on capital, you may consider getting a small business loan in Texas your only option. However, there are other options available, including grants.

When you receive a loan, you would have to pay it back eventually, along with considerable interest costs. With grants, on the other hand, you receive free funding that you will never have to pay back. Keep in mind, however, that grants also have their own restrictions and requirements that you would need to adhere to.

Let’s review some of the grant options available in Texas.

1. Texas Enterprise Fund Grant

Texas Enterprise Fund Grant is available to businesses that are located in Texas but compete with other states. To qualify for the grant, your business must employ at least 75 local citizens in full-time positions if your company is in the city, and 25 if it is based in a rural town. The total size of the grant will directly depend on the number of staff members on your payroll.

2. Texas Workforce Commission Skills for Small Business Grants

The Texas Workforce Commission Skills grant was created to help small businesses offset the cost of training their employees. As a small business owner, you will work directly with universities or colleges and select the courses for your employees to take. The grant will then provide the funding to cover the associated costs.

The grant can cover up to $1800 for new employees and up to $900 for employees who have been with the company for over a year. However, the training courses must fall within the specifically targeted industries as chosen by the Texas Governor.

3. Texas Department of Agriculture Grants

The Texas Department of Agriculture offers several different grant programs, and some of these are not related to farming. As such, there is a program providing grants for companies that work to design specialized crops with better nutrition and food safety. Another grant is offered to companies that work on nutrition education programs for children.

Other Resources for Texas Small Businesses

While financial assistance and funding are crucial for any company, new businesses can benefit significantly from other resources, such as coaching, mentorships, and networking opportunities.

Below you can find some of such resources available to Texas small businesses.

1. Local Texas SCORE Chapter

The Service Corps Of Retired Executives, or SCORE, offers a valuable small business mentorship program. As part of the program, a new business is matched with an established business mentor within the same industry. These mentors then assist the small business owner with setting up accounting, financial, and legal help, creating a business plan, and other important aspects of starting a new business.

2. Texas Chamber of Commerce

There are 510 different chambers of commerce available in the state of Texas. These chambers are made up of a group of local business owners and entrepreneurs, are membership-based, and often hold important networking functions for new and established businesses alike. 

As such, the Texas Chamber of Commerce regularly runs conferences and training workshops beneficial for start-ups and new businesses, as well as provides avenues to educate the community about your business.

3. Texas Small Business Development Center

The Texas Small Business Development Center Network contains over 60 centers strategically located in urban, rural, and suburban communities throughout the state. The Center offers free one-on-one business consulting services, which can provide you with valuable knowledge, tools, and resources required for a small business to succeed. 

The consultants are usually local industry experts who can help you put together a business plan, explore new markets, find financing, increase sales, or improve your overall profitability or productivity.

Final Words

If you are a small business owner in need of additional financial resources, don’t get discouraged. There are numerous lending options available, including Texas small business loans with banks and non-profit organizations, online lenders, business grants, and more. In addition, there are other valuable resources and financial support that can help you launch and grow your business in Texas.