Summary
- Texas offers diverse loan options, including SBA programs and state-specific initiatives, to support small businesses.
- Local lenders and community banks may provide more personalized lending experiences.
- Understanding regional economic factors can inform better financing decisions.
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Texas is a fantastic place to start or grow a business, whether you’re in Austin, Dallas, Houston, or one of the hundreds of other cities in the Lone Star State…but not without a little help. Here’s what you need to know about small business loans in Texas.
How a loan can help your Texas small business
When I say “help,” I’m referring to small business loans, which can be useful in a variety of ways. They can help you purchase what your business needs to run day-to-day, and ensure you have enough cash flow to make it through slow periods in your business.
Taking out a business loan can also help you build and grow your business credit, as long as you pay your monthly installment on time each month. Get the financing you need to take your Texas small business to the next level with our comprehensive guide to small business loans.
Business loan options for Texas small businesses
You have several options when it comes to business financing. Some you may qualify for, especially if you have great credit, while others may offer you financing at higher rates. Learn about the different types of small business loans available in Texas and how to secure funding for your business loan needs.
Bank loans
If your credit is excellent, you may qualify for a long-term loan with low interest rates from a bank or credit union.
SBA loans
The U.S. Small Business Administration also offers low-interest loans like the 7(a) loan or SBA 504 loans, which may be used for things like business expenses, equipment, and commercial real estate. Learn more at SBA.gov.
Lines of credit
If you need access to capital but don’t want it all at once (nor to have to start paying it all back at once), business lines of credit may fit the bill. Borrow from what you’ve been approved for and pay back just that amount.
Equipment financing
If you use equipment like computers, heavy machinery, or even company trucks, there are specific equipment loans you may want to explore. The equipment you’re buying acts as your collateral, which may lower interest rates.
Credit cards
Having business credit cards to make purchases for your company can be useful, even if you don’t have cash in the bank. Pay off your balance in full to avoid interest charges, and look for a card with rewards you can earn for your purchases.
Short-term loans
But what if you don’t qualify for any of the above options, maybe because your business is new or because you don’t have good credit? You may still qualify for short-term loans, though know that they tend to have higher interest rates.
Local Texas small business loans
There are a number of small business loans available locally in Texas. Local, smaller banks may be more invested in community development and more willing to loan to you if you’re keeping your small business in Texas. They may have more flexibility when it comes to their underwriting processes or better interest rates, especially if they’re a credit union.
If you have a local bank or credit union you already have a relationship with, whether personally or for your small business, that’s probably a good place to start.
Other local Texas businesses that provide small business loans include:
- PeopleFund — a nonprofit that provides help to small businesses in underserved communities, including those in low income areas or those owned by people of color, women, or veterans.
- Business and Community Lenders (BCL) of Texas — another nonprofit organization, BCL is focused on providing lending to support entrepreneurship and community development for small businesses, as well as personal lending for homeownership.
- Texas Trust Credit Union — since 1936, this credit union has been serving small businesses and individuals alike in Dallas and surrounding counties.
- Texas Capital Bank — with branches in every major city in Texas, Texas Capital Bank also offers loans in harder-to-fund industries.
- Business Investment Growth Austin (BiG Austin) — if your small business is in Austin or surrounding counties, you may qualify for a microlan ($15,000 – $50,000) from BiG.
National small business loans for Texas businesses
National banks are also willing to lend to small businesses in Texas, and may offer better repayment terms for borrowers with good business credit scores. However, many of these lenders are also known for helping small business owners who may not have good credit scores get the funding they need.
Short-Term Loan by Credibly
As quickly as 4 hours
Pros
- Set payments
- Pre-qualification, which means you can pre-qualify without hurting your credit
- With strong cashflow health, low personal credit scores still have great options here
Cons
- Must have at least $15,000 a month in deposits
- Repayment terms maybe shorter for some users
Funding Amount
Cost
Repayment Terms
Funding Speed
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Short-Term Loan by Kapitus
Kapitus offers short term loans up to $5,000,000 in as little as 24 hours. The process is quick and easy with limited documentation and offers the best prepayment discounts in the industry.
Pros
- Repayment options ranging 6-18 months with fixed rates options
- Competitive discounts for those who payoff early
- Extremely competitive product for higher revenue businesses - retains a higher average funding amount
- Your offers can improve as repayment history continues
Cons
- Longer industry restriction list
- Comes with a wide range of rates and terms.
Funding Amount
Cost
Repayment Terms
Funding Speed
Intermediate-Term Loan by Kapitus
Great for established businesses looking for large capital amounts.
Pros
- Repayment term of 2-6 years for those who qualify
- Favorable payment plans for businesses with $250k+ annual revenue
- Specialty loan programs for medical practices.
Cons
- Some repayment structures require weekly payments
- Favorable terms for 3+ years time in business.
Funding Amount
Cost
Repayment Terms
Funding Speed
Term Loan by OnDeck
This is a great option for businesses with consistent revenue, seeking competitive pricing working capital products. OD is known in the industry for their transparency and speed to fund. OD is the largest online lending company, which provides confidence to users with finding the right long-term partner to help fuel their company's growth.
Pros
- One application, two paths to finance your business - applicants are reviewed for both a Term Loan and Line of Credit
- Minimal paperwork
- Fast approval time
- Transparent pricing
- “White Glove” customer service
- Access to multiple lending options.
Cons
- Need a minimum of 1 yr time in business
- Not available in all states.
Funding Amount
Cost
Repayment Terms
Funding Speed
Texas small business grants
Small businesses in Texas can qualify for grants, as well, and it’s worth taking the time to apply. Some Texas small business grants include:
- Texas Workforce Commission Skills for Small Business Grants
- Texas Enterprise Fund Grant
- Texas Department of Agriculture Grant
Is there an update for 2025 in available Texas small business grants?
Grants are useful for small businesses because you aren’t expected to pay them back. However, they can be trickier to get than loans because of the high level of competition. You can find more details on what grants are available for small businesses in Texas at the U.S. Grants page here.
Other resources for small businesses in Texas
You can also find advice, coaching, networking, and other resources beyond financing in many organizations throughout Texas. Here are a few ideas:
Find your local Texas SCORE chapter
The Service Corps of Retired Executives (SCORE) matches a retired executive business mentor to a new business owner in the same industry. They can help you figure the ins and outs of running a business, from starting your business with a business plan to setting up accounting and finding legal help.
Join your local chamber of commerce
Local business owners and entrepreneurs make up the membership of the 510 chambers of commerce throughout Texas. They hold networking events and provide educational opportunities for their members, including workshops and conferences.
Take advantage of the Texas Small Business Development Center Network
With over 60 centers located throughout Texas, the Texas Small Business Development Center Network provides consulting services for small businesses, including coaching and mentoring from other established small business owners in your industry.
How to get a small business loan in Texas
Lenders may vary in their application process, but expect to be asked details about your business, how long it’s been in operation, your annual revenues, et cetera. And because you may be personally guaranteeing the loan, you may need to provide personal details like your Social Security number.
Once you’ve been approved for a loan, review the loan terms, which will detail the loan amount, interest rate, and repayment schedule. Sign the agreement, and funds should be deposited into your business checking account in as little as one business day.
How to choose the right loan for your Texas business
Start with your eligibility. Which financing options do you qualify for? Ideally, you would apply for the loan with the lowest interest so you minimize the extra fees you pay.
Also, consider how you plan to use the funds. Some loans, especially SBA loans, may have specific requirements for how you can use loan proceeds, and there are loans like equipment financing that are for certain purchases. Discover the best small business loan options in Texas and get tips for improving your chances of approval for your business loan application.
How to qualify for a business loan in Texas
Financial institutions may have slightly different criteria for how to qualify for a business loan, but generally, you can expect them to look at how long you’ve been in business, your credit scores, and your annual revenue.
New businesses may have difficulty qualifying for bank or SBA loans since they tend to approve applications from companies in business for two or more years. A better option for a startup may be a business credit card or short-term loan.
The higher your credit scores, both personal and business, the better the options you’ll qualify for. More on credit scores in the next section. Find out how to qualify for small business loans in Texas and get the funding you need to grow your business loan portfolio.
What is a good credit score to get a Texas business loan?
Each lender has its own criteria for required credit scores for small business financing. The SBA, however, does not have a published minimum credit score requirement, but many lenders will require a personal credit score of at least 640.
Some lenders may also look to see if you have business credit scores, which not all businesses do. If you don’t have them, learn how to establish business credit to expand your options.
And remember: even if you have bad credit, there are lending options for you, albeit at a higher cost.
How can I borrow money instantly as a Texas business owner?
There may be a few ways you can get instant financing as a small business owner in Texas. It depends on your lender, your business and business credit history, and how much money you need, but there are instant financing providers available. Most of these are online lenders with more flexible underwriting, and they usually have loans and other financing options available for startups and other businesses that may have difficulty finding more traditional financing.
It’s important to make sure that you can repay the loans you get through instant financing. They may have much shorter repayment terms and much higher interest rates than other types of business lending.
Common types of same-day business financing include:
- Bridge loans
- Short-term loans
- Merchant cash advances
- Business lines of credit
Use Nav to find a customized list of lenders and offers you’re most likely to qualify for. to find a customized list of lenders and offers you’re most likely to qualify for.
Is a business loan considered income in Texas?
Business loans, or “indebtedness income,” are not considered taxable income in Texas unless the loan is forgiven. In that case, the amount that is forgiven could be considered income under the Texas franchise tax code, although not in every case. For instance, Texas declared that the amounts forgiven for PPP loans were not considered taxable income in 2021. But in general, loans are not considered income because you’ll be paying them back.
Ways to use a small business loan in Texas
Business funding uses are as varied as the small business owners who apply for financing.
If you have slow periods in your business, you may simply want access to working capital so your bank account never runs dry. If you’re looking to expand, you might use a loan to purchase commercial real estate and renovate new retail space. You could use the funds to purchase larger inventory orders so you can save on a per-unit basis.
An equipment loan could be used to buy updated equipment that helps you serve more customers or speed up your production line. You could use the funds to hire more help to take some of the load off of yourself. Whether you’re just starting out or looking to grow, our guide to small business loans in Texas can help you find the right funding options for your business loan requirements.
How much funding does your business need in Texas?
Determining how much funding your small business needs in Texas depends on your industry, business structure, and business model. You may not need any funding at all if you’re planning to run a sole proprietorship or small LLC without many employees. Business registration fees in Texas are generally affordable and you only need to pay them once. Beyond that, if you’re working for yourself, you may not need very much money — often less than $1,000 — to buy yourself a computer, pay for a cell phone, or buy other minor equipment.
However, if you’re building a business with other requirements, like major equipment, a physical location, or many employees, you may have other financing needs. You might consider real estate loans, equipment loans, or business lines of credit to help raise funds for your business. You can usually find a loan for between $10,000 and $50,000 if you have at least six months of business history, and you may qualify for SBA loans up to $5 million if you meet their requirements.
Frequently asked questions
How do I apply for a SBA loan in Texas?
To apply for a SBA loan in Texas, first visit the SBA Loans website to find the loan that you’d like to apply for. You can then enter your zip code in their Lender Match and apply for the loan through your local lender. You can also apply for a SBA loan directly through your current bank or credit union if they offer them.
What credit score is needed for a SBA loan?
In order to qualify for a SBA loan, you need to have a minimum credit score of at least 640. You have a better chance of being approved for a SBA loan if your credit score is 680 or above. Nav can help you track your business and personal credit scores — head over to Nav today to get started.
Can you get denied for a small business loan?
You can be denied a small business loan for a number of reasons, including:
- Low personal credit score
- Low business credit score
- Not enough cash flow to meet loan repayment requirements
- Too much existing debt
- Previous default on a loan
- Tax liens, judgments, or bankruptcies against you
- Insufficient financial need
In addition, the SBA may deny you a small business loan if your business is in an industry that SBA doesn’t lend to, if you’re not considered a small business, or you don’t meet its other qualifications.
Are small business loans easy to get?
Small business loans may seem difficult to get, but they don’t have to be. The majority of small business loan applications are not approved, often because the borrower doesn’t know that they don’t meet the minimum qualifications or don’t know which loans they actually qualify for.
Nav can help you apply with confidence by taking your small business’s credit score, history, and financial information into account before recommending loans that you actually qualify for. Our tools can also help you find ways to improve your credit score or find other ways to improve your ability to qualify for a small business loan. Sign up to start seeing your options.
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Susan Guillory
Susan Guillory is an intuitive business coach and content magic maker. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.