Loans for Small Businesses in Texas: Do You Qualify for SBA?

January 6, 2025

Accessing affordable, reliable financing is a key part of building a successful small business. But securing the right loan for your business needs can be challenging. In Texas, our thriving economy and competitive markets make it even more vital for businesses to have loans that fuel growth and promote long-term financial stability.

SBA loans are ideal for established small businesses because they typically offer financial flexibility, favorable terms, and more accessibility than conventional loans. Learn the basics of SBA loans for small businesses in Texas, eligibility qualifications, and why your business should partner with Texas Gulf Bank for SBA loan needs.

The Basics of SBA Loans

The Small Business Administration (SBA) is a federal agency dedicated to encouraging small business growth by making financing options more accessible, especially for growing companies and established businesses.

Their primary way of supporting businesses is by partnering with banks, such as Texas Gulf Bank, to provide an SBA loan guarantee on a portion of the loan amount to eligible small business owners.

SBA loans offer transformative potential for businesses in Texas that qualify for this type of loan. For example, an SBA loan can be used to fuel business growth in these ways:

Expand Operations: Open new business locations or enter new markets.
Upgrade Technology: Invest in advanced tools to stay competitive and increase efficiency.
Hire and Train Staff: Fund workforce growth and development.
Improve Infrastructure: Renovate facilities to enhance operations or customer experiences.

SBA loans may provide your business with unrivaled versatility and greater opportunities for long-term, sustainable growth that may not be available through lines of credit or conventional small business loans. Let’s take a closer look at the SBA loan options that might be a good fit for your business.

SBA Loans: Strategic Lending Options

Although the SBA offers a range of loan options, the two most popular SBA loans for small business owners are the SBA 7(a) and the SBA 504 loans. Each loan helps enable businesses to improve cash flow, purchase commercial real estate, and achieve business goals.

SBA 7(a) Loan

The SBA 7(a) loan is the most common SBA loan and is highly versatile, making it a popular choice for businesses with a wide range of needs. Loan funds may be used for:

Real estate Acquisition, Construction and Refinancing
Equipment Financing
Business Acquisition
Leasehold Improvements
Working Capital/Inventory

SBA 504 Loan

The SBA 504 loan focuses on business expansion and long-term fixed investments to help increase business growth opportunities and promote job creation. Funds from SBA 504 loans can be used for investments such as:

Purchasing commercial land or facilities
Renovating existing properties
Acquiring heavy equipment or machinery

A key distinction of the SBA 504 loan is its unique loan structure, with 50% of the loan provided by the lending financial institution (e.g. Texas Gulf Bank), 10% as a business down payment, and the remaining 40% provided by a Certified Development Company (CDC). A CDC is a non-profit corporation certified and regulated by the Small Business Administration to package, process, close, and service SBA 504 loans.

Texas Gulf Bank has extensive SBA experience supporting business owners through each phase of the SBA loan process, and our SBA specialists can help you identify the right SBA loan for your specific business needs and long-term goals.

Does Your Business Qualify for SBA Loans?

While the SBA’s focus is to support business owners and spur job growth, there are qualifications small businesses must meet to be eligible to apply for SBA loans.

Businesses that want to apply for an SBA loan are first required to meet the following key criteria.

Business Size Standards

To qualify for an SBA loan, your business must meet the SBA’s definition of a small business. This varies by industry and is determined by the number of employees (typically 500 or less) and revenue thresholds.

You can check the SBA’s Size Standards Tool to confirm your business’s eligibility.

Business Type

Businesses interested in applying for SBA loans must be a for-profit business. In addition, certain industries are not eligible for SBA loans, such as gambling businesses, real estate investment companies, speculative businesses, and companies involved in illegal activities.

Location

Your business must operate within the United States or its territories. Additionally, you must show that your business significantly benefits the U.S. economy, such as by creating jobs or supporting local communities.

Time in Business

While startups may be eligible to apply, many SBA loans require businesses to be operational for at least two years. Although lenders assume less risk with SBA loans, Texas Gulf Bank prefers applicants with a proven track record of operations.

Creditworthiness

Your credit score plays a critical role in SBA loan program participation. Your business should have a strong credit score, and business owners should have a good credit history that demonstrates a history of responsible lending and repayment of debts.

Profitability and Cash Flow

Your business should be able to verify your ability to fully repay an SBA loan. Business applicants should provide documentation confirming current and future revenue projections, as well as existing debt schedules.

Business Plan and Use of Funds

As part of the SBA loan process, your business will need to provide a detailed description of how the loan funds will be used. Your business’ financial plan should clearly demonstrate revenue projections, what purchases or investments will be made to strengthen the business, and strategies for growth.

With Texas Gulf Bank in your corner, your business can successfully navigate the complexities of the SBA loan process to achieve an efficient, seamless loan experience.

Take the Next Step with Texas Gulf Bank

Securing a much-needed SBA loan can be daunting, but Texas Gulf Bank offers a positive lending experience from start to finish. Our expert SBA loan specialist will help you find the right loan tailored to your business needs and guide you through each step of the application process.

Contact our dedicated SBA lenders today and take the first step toward unlocking your business’s growth potential with loans for small businesses in Texas. Whether you’re expanding operations, investing in new technology, or hiring top talent, the right SBA business loan in Texas can make it happen.

All loans subject to credit approval