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.
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.
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.
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.
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.
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
Maximum Loan Amount
Business and Community Lenders of Texas
5.5% - 9.75%
Texas Capital Bank Small Business Loans
5.5% - 9.75%
Texas Trust Credit Union
5.5% - 9.75%
Business Investment Growth Austin Microloans
5.5% - 9.75%