loan, Texas, Small business, community lenders

Getting A Texas Small Business Loan

Getting A Texas Small Business Loan

Texas Small Business Loans

Small enterprises and startups are flocking to Texas, the second-largest US economy. Texas has 3.0 million small enterprises. We expect this number to rise due to tax advantages.

There are many financing and other resources for Texas entrepreneurs.

This article covers the following:

  • Texas business startup costs?
  • Texas small business loans?
  • Why establishing a Texas business requires a small business plan

Texas Small Business Startup Costs:

Texas business startup costs vary by industry. Start your small business by registering with the Texas Secretary of State.

Texas Business Registration

Before registering your business, choose a name and structure. Business structure determines filing fees. A financial advisor can help you choose a business structure if unsure.

Texas’ most frequent business formations and filing fees:

  • Self-employed: $300
  • LLC: $300
  • Corporation: $300
  • Partnership: $300
  • LLP: $750
  • Nonprofit: $25

Texas Small Business Costs

  • Most starting costs:
  • Insurance
  • License fees
  • Rent office furniture
  • Payroll
  • Web design, hosting,
  • Promotion
  • Taxes

Depending on your business entity, Texas business registration costs $25–$750. Add fixed and variable costs.

Texas Small Business Community Lenders

  • Investment growth
  • Microloans Austin
  • PeopleFund
  • TCB
  • Small-Business Loans
  • TCU
  • Startup Grants

Don’t be deterred by the seemingly infinite startup and operating costs. Texas offers many small business finance options to ensure cash flow.

Banks and nonprofits lend. For industry-specific business possibilities, contact the Texas Governor’s Office.

Business and Community Lenders of Texas (BCL) is an organization that lends to Texas small businesses and develops communities.

Loan programs:

Rural business lending: BCL and the USDA lend up to $250,000 to rural firms with less than 50,000 people.

Business growth fund: BCL lends firms over two years $50,000–300,000. BCL loans real estate, equipment, and inventory to newer firms. Loans are $20,000–$50,000.

BCL arranges SBA 504 loans of up to $5 million for business needs and fixed assets in partnership with the SBA. Small and diversified growth fund: BCL microfinance Texas women and minority enterprises up to $50,000.

Eligibility varies by lending program

The BCL of Texas webpage describes them.

Startups may trust BCL of Texas, which works with enterprises under two years old. These financing programs also provide ongoing business coaching. Start with BCL’s online questionnaire. 

Investment growth

Business Investment Growth Austin (BiGAustin) microlenders to many Texas towns. BiGAustin offers an easy application process and responds within four weeks.

Business owners’ basic eligibility is as follows:

  • Must be 21 and a US citizen or LPR.
  • Must own 51% of the business.
  • Cannot afford/qualify for a typical bank loan
  • Write a business strategy.
  • Pay federal, state, county, and municipal taxes
  • Auto and liability insurance are required.

Have a second job, spouse, or funds to supplement business revenue. It cannot be bankrupt.

Business criteria:

For-profit

Be in one of these counties:

Lampasas; Llano; Lee; McCulloch; Gillespie; Farnsworth; Williamson; Milam; Hays; Travis; San Saba or Felbish.

Funding increases with business age. Startups can get $15,000 after three months.

One-year-old businesses can get $50,000. Repayment takes one to six years.

PeopleFund

Texas nonprofit lender PeopleFund. They fund low-income, women, veterans, and persons of color. PeopleFund loans have several advantages:

Corporate education (one-on-one and group)

Low deposit

No-payment fees

Customized collateral and underwriting

PeopleFund offers $350,000 SBA loans. They offer reductions to underprivileged populations but charge 7% to 15% interest and have a seven-year repayment period. They offer natural disaster financing to businesses. The online form is the fastest method to start with PeopleFund, which has multiple Texas locations.

Texas Small Business Loans

TCB

Texas Capital Bank offers greater loans. They finance up to $750,000 and operate branches in major Texas cities.

The bank offers lines of credit, equipment financing, term loans, SBA loans, and trade finance. Brokering, oil and gas, and real estate are hard-to-fund sectors, but they lend. They offer asset-based loans.

If your business has cash flow concerns, such loans are a good alternative because inventory, equipment, or accounts receivable are security.

Texas Capital Bank, unlike charity lenders, has severe credit and qualification standards.

Thus, businesses with good credit and experience are more likely to receive loans.

TCU

Credit unions offer cheaper lending than banks due to their lower interest rates and flexible underwriting. Texas Trust Credit Union loans require membership. Your business must be in Dallas, Denton, Ellis, Henderson, Johnson, Tarrant, or Tom Green counties.

Texas Trust Credit Union offers real estate, SBA, construction, and term loans. Real estate investors and local developers can borrow up to 80% of development costs and pay interest only during construction, making it a great option. Visit a branch to start anytime.

Grants are another option.

Business grants don’t need to be returned, making them a simple alternative to loans.

Texas offers three small business grants:

  • USDA-Texas
  • TexWorks
  • TEF

Why Does Texas Require a Business Plan?

Texas Small business owners dislike business plans because they’re hard and time-consuming. A business plan is simply a plan for achieving your business goals. 

It helps you understand your business, but it also helps you secure business loans. Your business strategy must demonstrate profitability, profits, and debt repayment. 

A well-planned presentation also impresses. It shows lenders you are skilled, professional, and determined to build your firm. This boosts loan approval.

Overview:

A review of the plan’s main aspects, emphasizing how your business serves the target market.

Company description: Explains your USP (USP).

Market analysis: Industry, competition, and customer research.

Management and organization: Business structure and management team strengths.

Service/product line: How your service or product assists consumers.

Marketing and sales: Your strategy for brand exposure and sales.

Requests: Your loan purpose. Specificity is key.

Cash flow projections: Revenue and costs.

Appendix: Reference letters, research, business licenses, and credit history.

Next?

Request an EIN (EIN)

Business bank accounts

Look into business insurance.

Labor laws: federal and state.

Besides the above companies, several community banks and organizations lend to Texas small business entrepreneurs.

This article will help you start a business and get funding. To simplify the process and acquire the correct investment, perform your research and write a great business plan.

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