Loans for Small Businesses in Texas Looking to Grow

August 21, 2023

With a robust economy and strong markets, the Southeast Texas Gulf Coast continues to be a region where small businesses can grow and thrive. However, small business owners may need financing resources to fill in the gaps during seasonal fluctuations or to cover daily business operations costs until the company is off the ground.

This situation is where small business loans from Texas Gulf Bank may be able to help. Learn about our effective bank loans for small businesses in Texas, particularly SBA guaranteed loans, and how they can fund the next phase of your business growth.

What Are SBA Loans?

The Small Business Administration (SBA) is a federal agency of the U.S. government dedicated to encouraging small business growth across the country. They support small business owners by guaranteeing loans for companies that might not qualify for traditional bank loans.

SBA loans are available for many industries, including newer businesses still establishing their place in the market. SBA guaranteed loans empower business owners across the Lone Star State to pursue growth opportunities that might normally be out of reach, such as taking on larger clients, increasing product manufacturing, or expanding into new markets.

In order to apply for SBA guaranteed loans, businesses must meet the following eligibility requirements provided by the government:

Located within the United States or its territories
Operate as a for-profit business
Have owner equity to invest in the business
Offer detailed plans for loan funding
Established credit history
Demonstrate ability to repay loans

SBA loans could possibly enable your business to transition from property renters to property owners without needing to secure stand-alone real estate loans. With secure and reliable SBA funding in place, your business can focus time and resources on other areas of your business, such as Accounts Receivable, marketing, or new product development.

Which SBA Loan Is Right for Your Business?

Small business owners have two primary SBA loan options to choose from: SBA 7(a) loans and SBA 504 loans. These loan programs each come with specific requirements on how funds may be used, and these types of small business loans have a different loan application process.

SBA 7(a) Loans

The most popular SBA loan option for small business owners is the SBA 7(a) loan, which allows borrowers to use funds for a wide range of business purposes. The flexibility of these loans makes them an ideal choice for small businesses in pursuit of new growth opportunities.

SBA 7(a) loans can be beneficial to cover long-term and short-term expenses, including:

Commercial land purchases
Building construction or renovation
Working capital expenditures
Purchase of machinery, equipment, raw materials, and fixtures
Revolving lines of credit
Acquiring a business
Refinancing existing business debt

Borrowers may be approved for up to $5 million based on current and projected income levels, as well as credit history and other business factors. With SBA 7(a) loans, your business could have the funding needed to cover significant business expenses while allowing you to secure your cash flow.

SBA 504 Loans

The SBA also supports small business growth and job creation through its SBA 504 loan program. This guaranteed loan option focuses on providing funding needed for major business investments such as property, large-scale machinery, and heavy equipment.

One of the primary differences between SBA 504 loans and SBA 7(a) loans is that 504 loans are available through partnerships with Certified Development Companies. CDCs are local community development partners working in conjunction with the SBA to promote economic development in our region.

SBA 504 loans can be applied toward the following long-term business purchases and expenses:

Land or building purchase
Construction of new facilities
Building renovations
Long-term machinery and equipment
Land, street, parking, and utility improvements

SBA 504 loans offer a variety of maturity terms for repayment. Although borrowers may be eligible to borrow slightly more with SBA 504 loans than SBA 7(a) loans, SBA 504 loans may not be used for the following purposes:

Working capital
Inventory purchases
Lines of credit
Rental real estate investing
Refinancing business debts

SBA 504 loans are an appealing loan option for small businesses interested in fixed-rate financing and working with CDC partners that will support their business endeavors.

What to Expect For Your SBA Loan Application

Whether your business is interested in SBA 7(a) loans, SBA 504 loans, or both, you will need to submit several types of financial and business information as part of the application process. Your business will be required to provide financial documentation including but not limited to:

Completed business loan application
Detailed business plan
Business financial statements
Business tax returns
Business debt schedule and a full listing of assets
Monthly cash flow projections
Personal financial statements for each guarantor or owner with 20% or more ownership
Personal tax returns
Legal entity documentation
Property documentation, including builder contracts, construction plans, and building schedule

Gathering and preparing all needed documentation in advance of your application helps prevent lengthy delays that may impact the approval and funding of the SBA guaranteed loan. It can also help ensure your business has a smooth and seamless loan application process.

Learn More from Our Dedicated SBA Loan Specialist

Taking on a business loan is an important decision, and with many loan options available, including SBA guaranteed loans, you need an experienced lending expert on your side. Our SBA Loan specialist Dennis David specializes in guiding small businesses through every facet of the SBA loan process.

Dennis starts by learning all about your small business, including short-term and long-term needs, to determine if your company is eligible for SBA guaranteed loans and which type of loan would be the best possible fit. He then guides your business through the loan application process to ensure a smooth and seamless review process.

Contact Us to Review Loans for Small Businesses in Texas

If your business is ready to apply for the funding needed to spur growth and achieve long-term goals, SBA guaranteed loans from Texas Gulf Bank can help.

We have over 110 years of experience providing strategic loans for small businesses in Texas, so we have an in-depth understanding of the Southeast Texas Gulf Coast region and the needs of small business owners.

If you are ready to apply for an SBA loan, contact Texas Gulf Bank today. We can be reached at 1-800-467-7216, via email at sbaloans@texasgulfbank.com, or by visiting one of our many local banking centers. We’re ready to help you elevate your small business to new heights.

All loans subject to credit approval.