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Best Small Business Loans in Texas: Local and Online Options

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.

Best Small Business Loans in Texas
Tetiana Sitiugina-Babiuk
Financial Sector Specialist and Content Strategist

Reviewed by: Sarah Brooks, Personal and Business Finance Writer and Editor

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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 small business loan could go a long way in helping you start and expand your small business.

Top 5 Local Texas Small Business Loans

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 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 SB 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.

Top 5 Texas Small Business Loans - Main Features


 

Loan ProviderMaximum Loan AmountRepayment TermInterest
Texas Capital Bank$750,0001-7 years5.5% - 9.75%
Business and Community Lenders of Texas$300,0001-7 years5.5% - 9.75%
PeopleFund$350,0007 years7%-15%
BiG Austin$50,0001-6 years5.5% - 9.75%
Texas Trust Credit Union$350,0001-7 years5.5% - 9.75%

Top 3 Online Texas Small Business Loans

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 small business loans.

Some of the top online business loan providers include:

1. Kabbage - Best for Fair Monthly Profits

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Kabbage is an online lender offering lines of credit to small business owners up to $250,000. Backed by American Express, Kabbage is our top pick for businesses with fair monthly revenue amounts. Most lenders require at least $10,000 per month in revenue, but with Kabbage, you can qualify with just $3,000.

It takes just a few minutes to fill out an online application with Kabbage, and if approved for a line of credit, you can expect to see funds in your account in a timely manner.

Pros
Straightforward application
Fair monthly revenue required
Monthly repayment schedule
No prepayment penalties
Cons
Confusing fee structure
Personal guarantee required

Kabbage offers one product: A line of credit ranging from $2,000 to $250,000. Each time you make a draw, you can choose a repayment period of six, 12, or 18 month terms. For six-month terms, fees range from 2-9%; for 12-month terms, fees range from 7.5-18%; and for 18-month terms, fees range from 15.75-27%. Kabbage does not require collateral, but you will need to sign a personal guarantee.

To qualify for a line of credit from Kabbage, you’ll need a minimum credit score of 640, a monthly revenue of at least $3,000, and to be in business for at least 12 months.

The Bottom Line

Kabbage offers relatively high loan limits with lenient qualifications, including a fair monthly revenue requirement. If you need a small business loan to expand your business, pay for inventory, or cover gaps in wages, Kabbage is worth considering.

Try Kabbage

Learn more about Kabbage in our comprehensive review.

2. National Funding - Best for Fast Loan Approval

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National Funding is a top-rated online lender with an easy application and fast approval and funding times. They offer small business loans up to $500,000 to use as working capital, pay for inventory, cover marketing expenses, and more. They also offer equipment financing loans and leases up to $150,000. These loans allow you to purchase or lease new or used equipment.

A huge perk of National Funding is they will give you a discount if you pay your loan early. If you pay in full within 100 days, you’ll receive a 7% discount on the remaining balance.

Pros
Simple application
Lenient qualifications
Early payment discounts
No collateral required
Cons
Daily or weekly repayments
Rates can be high

National Funding short-term loans range from $5,000 to $500,000 with terms from four months up to two years. Payments are made daily or weekly. Equipment financing loans go up to $150,000 and terms range from two to five years, with payments made monthly. Rates and fees are not disclosed, but you can expect to receive better rates with a higher credit score.

To qualify for a small business loan from National Funding, you’ll need a minimum credit score of 600, have $250,000 or more in annual revenue, and be in business for at least six months. Equipment financing qualifications require a minimum credit score of 575, at least $250,000 in annual revenue, and a minimum time in business of two years.

The Bottom Line

National Funding is a great option if you’re looking for an easy application and fast loan approval. A funding specialist will help you throughout the process, and funds can be in your account within 24 hours of approval, making them a top choice for fast business loans in Texas.

Try National Funding

3. Fundbox - Best for Low Credit Score Loans

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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 600.

In addition, Fundbox 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.

Pros
Easy application
Fast funding
Low credit score requirements
No prepayment penalties
Cons
Small loan limit compared to other lenders
Rates can be high

Fundbox offers business loans and lines of credit up to $150,000 for small business owners in Texas. A term loan gives you one lump sum and you pay it back weekly over 24 or 52 weeks. Rates start at 8.33% for 24 week terms. A line of credit is a revolving loan, meaning once you pay it back, you can use it again. Lines of credit are paid back over 12 or 24 weeks each time you draw, and rates start at 4.66% for 12 week terms.

To qualify for a loan or line of credit from Fundbox, you need to have a minimum credit score of 600, be in business for at least six months, and have $100,000 or more in annual revenue.

The Bottom Line

Fundbox is an excellent option for small businesses in Texas who need up to $150,000 in funding. Qualifications are less stringent than traditional banks, and funds can be in your account within one business day of loan approval.

Try Fundbox

Learn more about Fundbox in our comprehensive review.

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. However, there are other options available, including business grants.

Let’s review some of the grant options available for small businesses 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 this 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 specific 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.

 Tetiana Sitiugina-Babiuk

Written by: Tetiana Sitiugina-Babiuk

Financial Sector Specialist and Content Strategist

Independent writer, content strategist, and financial sector specialist. Tatiana has an extensive experience in working with financial institutions such as Bank of Canada and Risk Management unit at FinDev Canada. She holds an MA in Financial Risk Management from the University of Toronto.

More about me
Sarah Brooks Personal Finance Writer and Editor

Reviewed by: Sarah Brooks

Personal Finance Writer and Editor

Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.

More about me

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