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Texas was named the best state to start a business in 2020 and 2021, with cities like Laredo, Lubbock, Austin, Dallas, and Fort Worth being hotbeds of entrepreneurship.
Here’s our list of the 11 best small business loans in Texas based on approval count, average loan size, and other vital factors.
The Top Texas Small Business Loans
|Small Business Loan
|Total Approval Count in 2022
|Average Loan Size
|Maximum Loan Amount
|Up to $6.5 million
|Up to 25 years for commercial real estate and up to 10 years for other purchases
|Newtek Small Business Finance
|Up to $10 million
|7 to 25 years
|Up to $750,000
|0 to 10 years for working capital, up to 20 years for fixed assets, and up to 25 years for real estate
|Live Oak Banking Company
|Up to $5 million for SBA 7(a) and up to $15 million for SBA 504
|Up to 25 years
|Business and Community Lenders (BCL) of Texas
|Up to $50,000 for starting businesses, up to $300,000 for growing businesses, and up to $5.5 million for SBA loans
|Up to 20 years for SBA loans, and varies for other small business loans
|Texas Capital Bank
|Up to $5 million for SBA 7(a) and up to $15 million for SBA 504
|10 to 25 years
|Up to $250,000 for most loans, and up to $5 million for SBA 504
|Varies for smaller loans, but up to 10 20 years for an SBA 504 loan
|Up to $500,000
|3 to 5 years for a term loan, 1 to 25 years for a business line of credit, and up to 25 years for an SBA loan
|Smaller loans up to $150,000, and larger loans up to $5 million
|10 to 30 years for SBA loans
|Up to $250,000 for a business line of credit
|6, 12, or 18 months for a business line of credit
|Up to $250,000 for a business line of credit, up to $500,000 for a business term loan, and up to $5 million for an SBA 7(a) loan
|6 months to 7 years for a business term loan and 10 years for an SBA 7(a) loan
We picked these banks because they do the highest amount of SBA 7a loan lending in Texas in 2022. Source.
Source: Wells Fargo
Wells Fargo offers both SBA 7(a) and SBA 504 small business loans with lengthy repayment terms and reasonable down payments.
As of mid-September 2022, Wells Fargo had approved 243 small business loans, and the average loan size was $161,356.
While this loan amount isn’t as high as many other Texas small business loans and may not be sufficient for large or fast-growing companies, it can work well for many small businesses in early growth stages.
Newtek Small Business Finance
It also had a total approval account of 142, which was one of the highest this year.
Newtek focuses primarily on manufacturing, wholesaling, services, general and heavy construction, and special construction industries.
But they’ve been known to branch out to other industries, as long as a company has at least two or three years of tax returns.
Loans can range from just $10,000 and go all the way to $10 million, with payback terms of 7 to 25 years. If you’d like to look at small business loans specific to your area, also check out our articles, Small Business Loans in Virginia or Small Business Loans Florida.
Comerica offers a few types of business financing for Texas small business owners, including:
- Unsecured lines of credit up to $100,000
- Secured lines of credit up to $500,000
- SBA loans up to $350,000
- Terms loans up to $750,000
It also offers commercial real estate loans to buy or upgrade property for your company.
While Comerica may not be sufficient for large or fast-growing Texas businesses, it can work well for small to mid-sized companies, with the average loan amount in 2022 being $382,346.
Live Oak Banking Company
Source: Live Oak Bank
With an average loan size of over $1.4 million in 2022, Live Oak Banking Company is a great choice for Texas business owners that need serious capital.
This lender offers three different Texas business loan options:
- Small Business Administration (SBA) loans
- US Department of Agriculture loans
- Commercial loans
It should also be noted that this lender received two awards in 2021 — the number one SBA 7(a) lender by dollar amount and the number one USDA B&I lender by dollar volume.
As for industries, Live Oak Banking Company offers small business loans to a wide variety of companies. Here is an exhaustive list.
Source: Live Oak Bank
Business and Community Lenders (BCL) of Texas
Unlike many other small business loan providers, BCL of Texas is, as its name suggests, based right in Texas, with branches in Austin and Dallas.
BCL Texas small business loans are generally for small to mid-sized companies, rather than large ones, as most of their financing ranges from $50,000 to $300,000.
However, BCL also has a Small Business Administration 504 loan program that goes much higher–up to $5.5 million.
“Through this unique program, your bank provides 50% of the financing and SBA provides up to 40% of the financing, with a 10-20% equity injection required.”
If you want to work with a lender that’s located close by, BCL is definitely worth considering.
Texas Capital Bank
Source: Texas Capital Bank
Located in Dallas, Texas Capital Bank is another lender located right in the heart of the state.
It focuses specifically on Small Business Administration loans, offering both 7(a)s and 504s.
In terms of capital, this bank offers hearty financing, with the average loan size in 2022 being $1,467,233.
However, an SBA 7(a) loan can be as much as $5 million, while an SBA 504 loan can be as much as $15 million, making it ideal for fast-growing small businesses.
PeopleFund has locations spread throughout Texas, including Houston, Austin, Dallas, San Antonio, Lubbock, and more.
Some of its main small business loans include an SBA 504, the BIPC small business accelerator, an SBA microloan, and flash funds for businesses that need a quick financial boost.
With the average loan size in 2022 from PeopleFund being just $154,387, this may not be the right choice if you need serious capital.
But if your needs are minimal and you want a wide variety of small business loan options to choose from while dealing with a lender on your home turf, PeopleFund is certainly worth considering.
Seek Capital (Best Startup Lender)
Source: Seek Capital
We like Seek Capital because its pre-approval loan application and credit approval process is dead simple.
All you have to do is answer a few basic questions, including how much you need, what you’ll be using the funding for, and your credit score (this won’t affect your credit score).
Then, Seek Capital will tell you what you’re eligible for.
While it may not be the right fit if you’re seeking massive funding over $1 million, it’s excellent if you’re a new startup seeking something like a small business incubator fund.
Tiny loans of only $5,000 are available if you just need a few bucks to get your idea off the ground. But you can also go significantly higher with SBA loans as well.
Lendio (Best Business Loan Broker)
Lendio calls itself “your one-stop shop for business finances.” And they aren’t kidding.
They have a ton of small business loan options, including accounts receivable financing, a merchant cash advance, business cash advance, SBA loans, and much more.
Here are just a few types of funding Lendio offers.
If you’re looking for maximum flexibility and want to find a hyper-personalized loan as a Texas small business owner, we highly recommend checking out Lendio.
It’s also worth mentioning that they’ve received serious accolades, including praise from CNBC, Forbes, and Entrepreneur.
They also have excellent reviews on Trustpilot.
Kabbage (Best Online Lender)
Like Lendio, Kabbage has a huge buffet of small business loans in Texas to choose from.
There are unsecured small business loans, including a business line of credit, working capital loan, commercial loan, short-term business loan, and more.
There are secured small business loans for equipment, merchant cash, factoring, and an SBA loan.
And Kabbage also has minority loans for women and veterans.
One thing to note about Kabbage is that they have shorter repayment terms than many other business loan providers. In fact, a business line of credit has 6-, 12-, and 18-month repayment options.
So if you’re the type of business owner that wants to get your money quickly and promptly pay it back, Kabbage can be the perfect lender.
Source: Funding Circle
One of the main things we like about Funding Circle is that they let you see if you qualify for multiple types of small business loans at once.
By completing a single application, for instance, you can see if you qualify for a business term loan, SBA 7(a) loan, and a business line of credit.
From there, you can filter through the results and look at the interest rate to find the optimal loan for your Texas small business. And there’s no obligation to apply.
We also like Funding Circle’s breadth of experience in helping 130,000 companies from over 700 industries get funding to fuel growth.
How to Select the Right Loan
To ensure you choose the right loan, you’ll need to assess your situation as a small business owner, looking at:
- Where you’re currently at financially
- Your projected growth
- How much funding you need short-term and long-term
- What type of repayment terms you’re looking for
If, for example, you only need a small amount of working capital of $100,000 or less, you should have plenty of options, as lenders like Lendio and Kabbage have several funding choices like business lines of credit, term loans, business grants, and so on.
On the other hand, if you need a larger loan amount of over $500,000, this will limit your options, and you’ll want to aim toward lenders like Texas Capital Bank or Live Oak Banking Company.
How to Qualify for a Business Loan in Texas
Have a Good Credit Score
680 is usually the minimum credit score needed to receive small business loans or grants from a preferred SBA lender or credit union.
If you need to quickly build business credit, it’s helpful to use a net 30 account that lets you pay off invoices in 30 days. It’s also helpful to use a business credit card and make prompt payments.
You can find more info on building business credit here.
And we personally suggest CreditStrong as one of the top credit builder loans.
Have a Proper Business Plan
A bank or credit union won’t want to back you without clear business goals and a plan for how you’re going to spend the money.
They want to know what your specific goals are, how you plan to reach them, and feel confident in your ability to repay.
Most lenders will want a concrete number of how much revenue you earn monthly or annually.
While the exact revenue required for eligibility will differ depending on the bank or credit union, you’ll need to be able to show how much money you’re bringing in.
Resources for Entrepreneurs in Texas
Texas Chamber of Commerce
With this Texas department, you can find helpful information like local banks in your area, small business grant programs, and resources for economic development.
You can search by city and region in the Texas Chamber of Commerce Directory.
Texas SCORE Chapter
The Service Corps of Retired Executives (SCORE) is a non-profit organization that provides counseling and helpful resources to empower Texas entrepreneurs to find funding through small business loans, grants, PPP loans, and more.
Texas Small Business Development Center
The Texas SBDC has over 60 centers throughout the state in rural, suburban, and urban areas.
There, you can gain access to an expansive network of professionals, tools, and resources to help grow your business regardless of what stage you’re at.
Nick is an author, small business owner, and finance/digital marketing writer. He’s been covering the industry for over a decade and loves exploring topics to help other small businesses succeed. You can connect with him at Nickmannwrites.com.