Securing funding is an empowering first step for new companies, startups, and entrepreneurs trying to break into their competitive niches. Acquiring capital to make one-time purchases, fund payroll, cover retail costs, and pay for real estate is not just critical, but it's a testament to your business's potential to make a name for itself in the industry.
Finding the best business loans in Dallas, TX, can help your Texas-based company take off. Here are some alternatives to traditional financing methods.
Types of Small Business Financing Options
Numerous small business financing options exist for companies that need funding to meet their needs.
Working Capital Loans: This type of loan is a financing option that gives business owners a sense of control. It's a tool to cover business expenses, typically for short-term requirements that help pay needed fees like payroll, inventory, and rent. Working capital loans are fast and easy to secure, and they allow businesses to retain full control over their operations.
Business line of Credit: A business line of credit is a flexible loan that provides small business owners with the chance to access a certain sum of money for daily expenses. This line of credit is ideal for payroll, financing campaigns, and repairing or purchasing new equipment.
Merchant Cash Advance: This financing option differs from a business loan but offers a cash advance to businesses based on specific criteria. The business owner and the lender agree on the advance amount, payback terms, holdback, and advance term. The main benefits of this type of loan are fast access to working capital, flexible repayment terms, and no collateral required.
Term loans: Term loans offer funding for businesses that are paid back in a monthly pre-set period that is used to cover large, one-time purchases. The benefits of this type of financing are that business owners can immediately borrow funds, there are lower interest rates, and it provides an opportunity to boost a personal credit score.
Best Option for Business Loans in Dallas, TX
There are numerous options based on specific requirements and criteria for small business owners, entrepreneurs, and startups that need immediate funding in Texas.
U.S. Small Business Administration
The SBA offers advice, counseling, contracting, and working capital expertise from professionals well-versed in the economy throughout Texas and the United States as a whole. This reputable governmental organization offers loans, credit, and other financing options to help small businesses capitalize on opportunities in the market.
The SBA has six offices in Texas, with one located in the Dallas/Fort Worth area. The SBA offers four different loan types suitable for small business owners in Texas:
- 7(a) loans: 7(a) loans are the most popular type of SBA loan, used for acquiring real estate, short or long-term capital, refinancing debt, purchasing new equipment, changing ownership, or buying high-tech machinery.
- Eligibility: Operate a for-profit business located in the U.S., small under the SBA Size Requirements, creditworthy, and not able to obtain the desired credit from non-Federal and non-State sources.
- 504 loans: This type of loan offers fixed-rate financing up to $5 million for fixed assets that can be used to purchase new land, construct new facilities, or improve land, streets, and existing structures.
- Eligibility: Operate a for-profit company in the U.S. and have a tangible net worth of less than $15 million and an average net income of less than $5 million after federal income tax.
- Microloans: Smaller loans of $50,000 or less are designed for intermediary lenders and nonprofit organizations. A microloan is a smart choice for working capital, inventory, furniture, and machinery.
- Eligibility: Depends based on the intermediary, but each one typically requires some type of collateral. Individuals can find an SBA-approved intermediary in their local area.
- Lender Match: Lender Match is a tool that matches borrowers with lenders that meet their unique needs, providing business owners with the chance to compare plans, fees, and terms.
- Eligibility: Gather the necessary documents, such as a business plan, amount and use of funds, credit history, collateral, financial projections for your business, plan to pay the funds back, and industry experience.
LiftFund
LiftFund offers small business owners microloans, SBA loans, and specific loans designed for underdeveloped communities, minorities, and female-owned companies in the Dallas and Fort Worth metropolitan areas.
For over three decades, LiftFund has offered millions of dollars in loans to deserving business owners, startups, and entrepreneurs who deserve a chance at running a successful company. This local nonprofit organization focuses on helping the state's economy by distributing more than 27,000 small business loans and creating nearly 100k jobs in the last 30 years.
The online application process involves:
- Providing personal and business information.
- Stating whether you own or rent a home, social security information.
- Any missed payment information.
Texas Capital Bank
Texas Capital Bank offers SBA loans for new business owners or small-to-medium-sized businesses that need to expand their current plan, renovate their property, repair required items, or purchase a new warehouse or retail space. Texas Capital Bank works with the Small Business Administration to offer lending options to small businesses in the state so that privately owned companies can compete with widespread organizations.
SBA loans often feature lower down payments, flexible repayment terms of up to 25 years, lower cash flow requirements, and the chance to preserve much-needed cash for other weekly expenses, such as payroll, repairs, stock, and rent.
Texas Capital Bank offers two types of SBA business loans in Dallas, TX: the SBA 7a Loan offering up to $5 million in loans, and the SBA 504 Loan, specifically designed for real estate and equipment.
North Texas Angel Network
The Dallas-based North Texas Angel Network (NTAN) helps provide small businesses with investment funds, financial capital, and experimental funding to take risks and grow their business.
Angel investor members have a wide variety of expertise that can help entrepreneurs develop a foolproof business model, including professional assistance with building, real estate purchasing, executive management strategies, and entrepreneurial tips.
NTAN is open to applications from all entrepreneurs and small businesses based in the United States, with a heavy focus on healthcare, technology, and service companies.
Some criteria to consider before applying for an NTAN loan include:
- An expert management team with a positive reputation
- Scalable business model with the potential for growth
- Proof of concept
- Consumer Products — minimum of $500k in annual revenue
- Business opportunities that can be enhanced with investment money
PeopleFund
PeopleFund is more than just a nonprofit organization that offers small business loans, educational support, and financial guidance. It's a community that provides flexible loans to small businesses, entrepreneurs, nonprofit organizations, and startups throughout Texas.
PeopleFund’s SBA 504, SBA 7a, and SBA Microloan options all help local business owners facilitate economic growth in their neighborhoods, creating a more well-rounded economy and a stronger sense of community.
PeopleFund also offers working capital term loans, lines of credit, and equipment financing, all with no prepayment penalties, a dedicated team of professionals to answer any questions, and low downpayment fees.
This nonprofit organization offers a few different loan programs:
- City of Eagle Pass: People Fund and the City of Eagle Pass collaborated and created the Downtown Revolving Loan Fund, which provides a low-interest choice to business owners who want to open a new entrepreneurial idea in the CBD.
- Flash Funds: Flash Funds of up to $25,000 are ideal for companies that need funding as soon as possible without worrying about hefty interest rates.
Business and Community Lenders
Business and Community Lenders (BCL) is a U.S. Treasury Certified Development Financial Institution that provides funding for rural communities or underserved areas, specifically focusing on minority or female-owned businesses.
The BCL offers different funding and loan options for new owners who need to fund their unique endeavors:
- Texas Small and Diverse Growth Fund: This fund is specifically designed for minority and female-owned companies and offers flexible collateral choices, different underwriting options, and small business-focused requirements that make for an easier approval process.
- New Business Lending: BCL offers working capital for new business owners who have opened their company in the last two years. This loan gives loans up to $50k that can be used for working capital, furniture, technology, repairs, and lines of credit.
- DECA Loan Fund: The BCL is a nonprofit certified by the U.S. Treasury. It can provide a Certified Development Financial Institution loan fund for Texans to build personal credit and business net worth. The DECA loan provides funding up to $50,000 that is usable for inventory, rent, improvements, business construction, vehicles, real estate, debt refinancing, and payroll.
Find Business Loans in Dallas, TX, for Your Startup
One way Texan business owners can find the loan that best suits their needs is by researching local funding options. In addition to traditional financing methods, small business owners, minority businesses, and female-owned companies can look at other niche loans to get their businesses off the ground.
Still trying to figure out where to find business loans in Dallas, TX? We can help connect you with business lenders that meet your needs. Contact us today to get started with your Dallas-based endeavor!
