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Texas is a smart place to start a new business. With the second-largest economy in the U.S., the state has no state income tax, a steady population boom, and major business hubs in Houston, Dallas, Austin, and San Antonio. If you run a small business in Texas, you have a lot of funding options available to you, from federal SBA loans to state programs to fast online lenders.
The right loan depends on the type of business that you own. If you run a trucking company in Dallas, for example, you'll have different needs than a tech firm in Austin. The right loan depends on many different factors, including your credit score, your industry, and how fast you need the money.
As CEO of Clarify Capital, I work with small business owners in Texas all the time, and I understand what trips them up the most when they're looking for funding. Below, I'll cover the loan types available in the state, the Texas-specific programs worth a look, and how to improve your odds of getting approved.
| Loan type | Borrow up to | Rate | Speed | Good for |
|---|---|---|---|---|
| SBA 7(a) | $5 million | Around 10% to 15% APR | 30 to 60+ days | General use, working capital, expansion |
| SBA 504 | $5.5 million | Fixed, around 5% to 7% | 30 to 60+ days | Real estate and large equipment |
| SBA Microloans | $50,000 | Around 8% to 13% APR | 30 to 90 days | Newer businesses, smaller funding needs |
| Term loan | $5 million | Starting at 6% APR | As fast as same-day | One-time purchases, expansion |
| Business line of credit | $5 million | Starting at 6% APR | As fast as same-day | Cash flow gaps, ongoing needs |
| Equipment financing | 100% of equipment value | Starting at 6% APR | 1 to 5 days | Trucks, machinery, tools |
| Merchant cash advance (MCA) | $5 million | Factor rate 1.08 to 1.45 | As fast as same-day | Lower credit, fast funding |
How Texas Metro Areas Compare
Each major Texas metro has its own unique industry and culture. Here are some of the trends I've noticed.
Houston
Energy, petrochemicals, and the Port drive the economy. Lenders here often work with energy services, trucking, medical practices, and import-export.
Dallas-Fort Worth
One of the most diverse economies in Texas. Banking, tech, defense, logistics, and healthcare all have a major presence.
Austin
Tech, hospitality, and a steady startup pipeline. Borrowers here come to me looking for fast funding to keep pace with growth.
San Antonio
Tourism, healthcare, the military, and manufacturing are all big here. Many businesses are family-owned and have been around for decades.
What Sets Texas Apart
Texas has more than 3.5 million small businesses, making up 99.8% of all businesses in the state.
Two things make Texas different from other states for lenders. First, no state income tax means business owners keep more of what they earn, which often shows up as healthier cash flow. Second, Texas has a strong network of community development financial institutions (CDFIs) and nonprofit lenders that fill gaps left by traditional banks.
The state also has government agencies that support small businesses, including the Texas Workforce Commission and the Office of the Governor.
That said, Texas business owners still face the same hurdles as owners in any other state. Banks tend to want strong credit, two or more years of tax returns, and collateral. If you don't check every box, you have other paths. Online lenders, CDFIs, and SBA programs can all help.
Texas Programs and Resources
The state and its nonprofit lenders run several programs to help Texas owners get funding or guidance. The grid below covers the ones I point clients to most.
| Program | What it offers |
|---|---|
| Texas Enterprise Fund (TEF) | A performance-based grant the governor's office uses for major projects and corporate relocations. These are not for most small businesses, but worth knowing about. |
| Texas Product Development and Small Business Incubator Fund | Provides loans to product-based businesses and incubators, run through the Office of the Governor. Focused on job creation. |
| PeopleFund | A statewide community development financial institution (CDFI) offering Microloans up to $50,000 and small business loans up to $5 million for existing businesses. Known for working with owners turned down by banks. |
| LiftFund | A nonprofit based in San Antonio and one of the largest microlenders in the country. Lends to startups and existing businesses across Texas. |
| Texas SBDC Network | Provides free consulting offices around the state to small business owners. They don't lend, but they help build loan packages and prepare SBA applications. |
| SBA District Offices | There are six offices across Houston, Dallas/Fort Worth, San Antonio, El Paso, Lubbock, and the Lower Rio Grande Valley. Each connects you with preferred lenders nearby. |
SBA Loans in Texas
There are three SBA programs that cover most borrowers in Texas. The U.S. Small Business Administration backs loans through approved lenders, but it doesn't lend itself. It guarantees a portion of the loan to lower the risk for lenders. Because of this, SBA loans tend to have lower rates and longer terms than other options available.
SBA 7(a) loans. This is the most common SBA loan. You can borrow up to $5 million for working capital, equipment, real estate, or refinancing debt. Collateral is not required for 7(a) loans under $50,000. But for larger amounts, lenders may ask for collateral. A personal guarantee is required from anyone who owns 20% or more of the business.
SBA 504 loans. These loans are built for fixed assets like real estate and major equipment. The loan is split between a bank and a Certified Development Company (CDC). Rates are fixed, and terms run up to 25 years. These work well for buying a building or financing a large piece of equipment.
SBA Microloans. Microloans are smaller loans up to $50,000 issued through nonprofit intermediaries. PeopleFund and LiftFund are two of the largest in Texas. Microloan intermediaries usually require some type of collateral and a personal guarantee. They tend to work with newer or smaller businesses.
SBA processing can take anywhere from two weeks to 60 days, depending on the loan. If you need money quickly, an SBA loan may not be the right path. But SBA loans do offer competitive rates for borrowers who can afford to wait.
Texas Small Business Grants
Grants are another option if you need funding. The nice thing about grants is that you don't have to pay them back. But the downside is that they are often competitive and slow. Most owners who apply don't get them, and even those who do often wait months for the funds.
If you're looking to apply for grants, here are a few places to start:
Grants.gov. The federal government's grant directory. Search by state and industry.
Texas Office of the Governor Economic Development. Several state-run grant and incentive programs, mostly for larger projects.
City-level programs. Austin, Houston, and Dallas each fund local small business grant programs from time to time. Check with your city's economic development office.
Industry and demographic grants. Some grants target women-owned, veteran-owned, or minority-owned businesses.
Alternative Financing Options
If you need funding more quickly, alternative lenders can be a good option. The application is short. Approval can come the same day for some financing options. Credit requirements are often more flexible. That said, rates are usually higher than SBA or bank loans.
Common options from alternative lenders include:
Term loans. A lump sum repaid over a set period, usually six months to ten years.
Business lines of credit. Revolving credit you can pull from as needed.
Equipment financing. Loans secured by the equipment you're buying.
Merchant cash advances. A lump sum repaid as a percentage of daily sales.
Invoice factoring. Cash advanced against your unpaid customer invoices.
Working capital loans. General-purpose funding for payroll, inventory, or day-to-day expenses.
Clarify Capital works with more than 75 lenders to help Texas business owners find the right fit for their needs. Qualified borrowers can get funded as fast as same-day, and checking your options will not affect your credit score.
Financing Options by Texas Industry
Still not sure what funding fits your needs? Below, I've outlined some of the most common industries in Texas and the funding needs they typically have.
| Industry | Common funding fit |
|---|---|
| Oil and gas/energy services | Equipment financing for rigs and trucks; lines of credit for project gaps |
| Tech and software | Term loans and lines of credit for hiring and growth |
| Agriculture and ranching | Equipment financing; lines of credit for seasonal cash flow |
| Construction | Equipment financing; lines of credit for materials and payroll |
| Healthcare practices | Term loans for buildouts; equipment financing for medical gear |
| Restaurants and hospitality | Working capital loans; merchant cash advances for fast funding |
| Trucking and logistics | Equipment financing; invoice factoring for unpaid loads |
| Retail | Lines of credit for inventory; term loans for expansion |
How To Improve Your Approval Odds
Good financial habits can help strengthen your application and make you more attractive to lenders. These are the things I tell clients to focus on.
| Tip | Why it helps |
|---|---|
| Keep clean bank statements | Lenders look at your last three months of statements to gauge cash flow. Avoid overdrafts and bounced payments. |
| Separate personal and business finances | A dedicated business bank account makes your numbers easier to verify and looks more professional to lenders. |
| Build business credit | A strong business credit score can lead to better rates. Pay vendors on time and report tradelines through Dun & Bradstreet. |
| Work with a Texas SBA preferred lender | Preferred Lender Program (PLP) banks can approve SBA loans faster because they have the authority to make decisions in-house. |
| Use the Texas SBDC | Free consulting can help you build a stronger loan package and avoid common mistakes. |
| Apply with realistic numbers | Asking for the right amount based on your revenue beats asking for too much and getting denied. |
Minimum Qualifications
$10,000 in monthly revenue
Your business must earn at least $10K per month in a business bank account.
500+ credit score
You can get approved with any credit score. But the better your credit rating, the better interest rates lenders offer. Your FICO score should be above 500.
Minimum six months in business
Your company should be operational for a minimum of six months. This shows business lenders that your company is sustainable and won't go out of business.
Have a business bank account
Your Clarify advisor will need three or four months of your most recent bank statements to verify income. This is just to see you're actually making $10K+ month in revenue.
Get Funding for Your Texas Business
Texas small business owners have a lot of funding options available to them. The right one depends on how fast you need the money, what your credit looks like, and what you plan to do with the funds.
If you're ready to see what you qualify for, apply today with Clarify Capital. The application takes about two minutes, checking your options will not affect your credit score, and qualified borrowers can get funded as fast as same-day.
Frequently Asked Questions on Small Business Loans in Texas
Still have questions about small business loans in Texas? Below, I've compiled a list of some of the most common questions I hear from borrowers.
How Do I Get a Small Business Loan in Texas?
Most Texas business owners go through one of three paths. They apply at a local bank, they apply for an SBA loan through an approved lender, or they apply with an online lender like Clarify Capital. The fastest route is usually online. You fill out a short application, share three months of bank statements, and qualified borrowers can get funded as fast as the same day.
Can a Startup LLC Get a Loan?
It's hard. Most lenders want at least six months in business, including Clarify Capital. SBA Microloans through nonprofits like LiftFund or PeopleFund are sometimes available to newer businesses, but they often require strong personal credit, a detailed business plan, and a personal guarantee. If you just started your business, try building revenue first and then apply once you have a few months of bank statements. This will help put you in a stronger spot.
How Much Is the Monthly Payment on a $50,000 Business Loan?
This will depend on the rate and the term. For example, a $50,000 loan at 6% APR over 24 months runs about $2,216 a month. The same loan at 12% APR over 12 months runs about $4,442 a month. Stretching the term to 60 months at 6% APR drops the payment to around $966. Your Clarify advisor can show you specific payment scenarios based on your qualifications.
What Is the SBA $10,000 Grant?
You may be thinking of the EIDL Advance, which gave eligible businesses up to $10,000 from 2020 to 2021. That program is over now. The SBA doesn't currently run a $10,000 grant for general small businesses. The SBA's main offerings today are loans, 7(a), 504, and Microloans, and disaster loans for businesses hit by federally declared disasters.
What Credit Score Do I Need for a Small Business Loan in Texas?
This depends on the lender and the type of financing. Banks and SBA preferred lenders usually look for 680 or higher. Online lenders can be more flexible. Clarify works with borrowers with credit scores starting at 550 for most financing types. Remember: Higher scores get better rates and better terms. Lower scores can still qualify, but you may pay more.
Are There Special Loan Programs for Women-Owned Businesses in Texas?
Women-owned businesses in Texas can access SBA-backed loan programs, plus support from SBA Women's Business Centers. The SBA doesn't have a separate loan product specifically for women. The SBA's Office of Women's Business Ownership oversees WBCs, which offer training and help navigating funding options. Texas has WBC resources in major markets, including Houston, Dallas, and Austin, and SBA district offices can help business owners find local partners. LiftFund and PeopleFund also lend to women-owned businesses. Many CDFIs offer counseling and connections specific to women-owned firms as well.
How Does Clarify Capital Protect My Information?
Your privacy and security are important to us. Clarify follows SOC 2 security principles. Your application, bank statements, and personal data are encrypted and stored securely.
Michael Baynes
Co-founder, Clarify
Michael has over 15 years of experience in the business finance industry working directly with entrepreneurs. He co-founded Clarify Capital with the mission to cut through the noise in the finance industry by providing fast funding and clear answers. He holds dual degrees in Accounting and Finance from the Kelley School of Business at Indiana University. More about the Clarify team →
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