How to Get a Small Business Loan in Texas
In other words, Texas is a great place to start or move your business. Still, lenders aren’t going to approve your application just because you’re doing business in the Lone Star State.
You’ll still need to prepare yourself to choose the right loan and submit a strong application. To that end, this post will summarize everything you need to know about obtaining a small business loan in Texas.
Why Apply for a Texas Small Business Loan?
Low taxes, minimal regulation, plus a large and growing business and consumer market make Texas a great state in which to do business. To compete in this hot market, though, entrepreneurs need additional funds.
While there are other options, business loans have helped many small business owners finance successful growth investments. Also, Texas is a particularly good place to invest in growth in industries such as transportation, retail, construction, technology, and many others.
Another reason to invest in Texas is the massive growth of its population. According to a recent report from U-Haul, Texas had more one-way U-Haul trucks entering in 2021 than any other state in the country.
Types of Small Business Loans in Texas
Texas’s relatively lenient approach to business regulation also extends to business loans. As a result, there are many lenders that provide many types of loans to choose from in Texas.
You can expect to find plenty of lenders offering the following types of term loans and business funding:
- Lines of credit
- Traditional and online commercial business loans
- Commercial real estate loans
- Small Business Administration (SBA) loans and microloans
- Equipment loans
If you’re interested in any of these, you can learn more about each elsewhere on our blog in the following posts:
- The Pros and Cons of Securing a Line of Business Credit
- The Pros and Cons of Commercial Business Loans
- Real Estate Business Loans: What You Should Know
- What You Should Know About SBA 7(a) Loans
- The Pros and Cons of Equipment Loans
Alternative Loans in Texas
In addition to the loan programs mentioned above, Texas also has a robust selection of alternative financing. These other working capital options include:
- Accounts receivable financing
- Merchant cash advances
- Medical business loans
Lenders to Consider in Texas
In Texas you can choose between traditional lenders like credit unions and banks as well as online lenders. Banks in Texas include large, multinational corporations and smaller, local banks and credit unions.
According to NerdWallet, the best lenders local to Texas are:
- Business and Community Lenders (BCL) of Texas
- PeopleFund Small Business Loans
- Business Investment Growth Austin (BiGAustin) Microloans
- Texas Capital Bank Small Business Loans
- Texas Trust Credit Union
You can also use the SBA’s Lender Match tool to find a reputable SBA lender.
Finally, you could also consider working with an alternative lender in Texas. Many alternative lenders, such as Fora Financial, work with small businesses throughout the nation. So you don’t necessarily have to find a lender who has a physical location in Texas to get a loan.
How to Apply for a Texas Business Loan
If you’ve ever applied for a business loan in the United States, you’ll be well-prepared to do so in Texas. While procedures and policies will vary by state, most lenders will have a similar loan process.
First, you’ll need to determine and document how you plan to use your loan in a business plan. Many lenders require this as part of your loan application. However, it’s a good idea regardless to consider how you’ll use your loan.
Along with your business plan, you’ll need to compile personal and business documentation. This includes cash flow and income statements, balance sheets, ownership information, and much more.
You’ll then compile this information in your loan application, which must be submitted to the lender. Once the lender reviews your application, assuming you qualify, you’ll receive a loan offer.
Provided that you agree to the terms and conditions of the loan offer, your next step is to accept the offer. After that, you’ll receive your loan funds, or a portion of them, and pay off your loan based on the agreed-upon repayment terms.
Conclusion: Fuel Your Growth in The Lone Star State
Business is good in The Lone Star State. Plus, its rapid population growth and business development don’t seem to be slowing down. With a strong business strategy, there are many advantages to Texas that you can leverage to grow your business.
So, when you’re ready to expand or establish your presence in Texas, consider a business loan to make it happen.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.