SBA Loans in Texas for Small Businesses Now

SBA Loans in Texas: Your Comprehensive 2025 Guide

Texas is the number one state for small businesses in the United States, thanks to its robust economy, diverse industries, and entrepreneur-friendly climate. For Texans aiming to launch, expand, or acquire a business in 2025, SBA loans offer essential financial support with favorable terms. This guide covers everything Texas small business owners need to know about SBA loans this year, from the 7(a) and 504 programs to microloans, application steps, preferred lenders, and local resources.

Why Texas Small Businesses Choose SBA Loans

• Low Down Payments: As little as 10% down for qualified borrowers
• Flexible Uses: Funding for startups, acquisitions, working capital, equipment, or property
• Long Repayment Terms: Up to 25 years for real estate
• Competitive Fixed & Variable Rates: Lower than most private business loans
• Government Backing: SBA guarantees a portion (typically 50-85%) to reduce lender risk

2025 Market Context for SBA Loans in Texas

In 2025, Texas continues to lead in U.S. job creation and entrepreneurship, with rapidly growing cities like Austin, Dallas, Houston, and San Antonio. The SBA has increased lending limits and streamlined application processes for faster funding, especially for underserved businesses, veterans, and rural entrepreneurs. As interest rates are forecasted to stabilize, SBA-backed loans remain a strategic option for affordable business financing.

Types of SBA Loans Available in Texas

1. SBA 7(a) Loans

The flagship program, ideal for most business purposes: working capital, expansion, equipment, inventory, or acquisition. Maximum loan amount is $5 million in 2025.

Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!

Test Your Expertise: The Complexities of the 1031 Exchange

As a sophisticated real estate investor, you understand that the 1031 Exchange is a cornerstone strategy for tax deferral and wealth accumulation. But beyond the basics, the intricacies of the 1031 Exchange rules can pose significant challenges. This quiz is designed to test your in-depth knowledge and highlight critical nuances that separate casual investors from true experts in 1031 Exchange transactions.

Instructions: Choose the best answer for each question.

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Question 1: Understanding "Like-Kind" in a 1031 Exchange

Which of the following scenarios most likely qualifies as a like-kind property exchange under IRS Section 1031, allowing for 1031 Exchange tax deferral?

a) An investor exchanges a portfolio of publicly traded REIT stocks for a commercial retail building. b) An investor exchanges their primary residence, used for personal living for 15 years, for a duplex intended for rental income. c) An investor exchanges raw land held for appreciation in Texas for a stabilized apartment complex in Florida, both held for investment. d) An investor exchanges a classic car collection (personal property) for a single-family rental home (real property).

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Question 2: Navigating the 45-Day Identification Period for a 1031 Exchange

An investor sells a multi-family property on June 15th for a 1031 Exchange. According to the strict timelines, by what date must they identify their replacement properties to comply with the 1031 Exchange requirements?

a) July 30th of the same year, as the 45-day period includes weekends and holidays. b) August 29th of the same year, allowing for an extra 45 days if needed. c) December 12th of the same year, aligning with the 180-day completion period. d) January 1st of the following year, if they plan to file for an extension.

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Question 3: The Role of a Qualified Intermediary (QI) in a 1031 Exchange

Why is the engagement of a Qualified Intermediary (QI) absolutely critical for the validity of a 1031 Exchange?

a) The QI provides investment advice and helps the investor choose the best replacement property for their 1031 Exchange strategy. b) The QI acts as a liaison with the IRS, directly negotiating tax liabilities related to the 1031 Exchange process. c) The QI holds the proceeds from the relinquished property's sale, preventing the investor from having "constructive receipt" of funds, which would invalidate the 1031 Exchange. d) The QI provides legal and tax advice to ensure the 1031 Exchange is perfectly compliant

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Question 4: Understanding "Boot" and its Impact on a 1031 Exchange

An investor sells a commercial building with $500,000 in equity for a 1031 Exchange. They purchase a replacement property for $450,000, effectively reducing their debt by $50,000. What is the tax implication of this scenario within the 1031 Exchange framework?

a) The entire 1031 Exchange is disqualified because the investor "traded down" in value. b) The $50,000 in reduced debt is considered "boot" and will be immediately taxable as partial gain in this 1031 Exchange. c) There are no immediate tax implications, as the primary goal of the 1031 Exchange is only about the "like-kind" nature of the properties. d) The investor can defer the $50,000 as long as they pay off other personal debts with the funds, still qualifying for a full 1031 Exchange.

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Question 5: Advanced 1031 Exchange Strategies & Flexibility

An investor aims to sell a highly appreciated single-tenant retail property and replace it with multiple smaller, diversified multi-family units to spread risk. Which of the following 1031 Exchange identification rules best allows for this diversification strategy, maintaining eligibility for a 1031 Exchange?

a) The "Three Property Rule," where the investor can identify up to three properties of any value, regardless of the relinquished property's value, for their 1031 Exchange. b) The "200% Rule," allowing identification of any number of properties, provided their aggregate fair market value does not exceed 200% of the relinquished property's value for the 1031 Exchange. c) The "95% Rule," which states that if more than three properties are identified, the investor must acquire at least 95% of the aggregate value of all identified properties to qualify for the 1031 Exchange. d) All of the above are valid identification rules within a 1031 Exchange, offering flexibility for various investment strategies.

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The Ultimate DSCR Loan for Rental Property Quiz

Are you looking to expand your real estate investment portfolio? A DSCR loan might be the perfect tool to help you achieve your goals without relying on traditional income documentation. Test your knowledge with this quiz to see if you're ready to master the intricacies of a DSCR loan for rental property.

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Page 1 of 5

What is the primary factor a lender considers when approving a DSCR loan for rental property? A) The borrower's personal income and debt-to-income (DTI) ratio. B) The borrower's credit score and employment history. C) The property's potential rental income compared to its monthly expenses, known as the Debt Service Coverage Ratio. This is the key metric for a DSCR loan for rental property eligibility and approval. D) The total value of the borrower's existing investment properties and personal savings.

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How does a DSCR loan for a rental property differ from a conventional mortgage for a personal residence? A) A conventional mortgage requires a DSCR calculation, whereas a DSCR loan for a rental property does not. B) A DSCR loan for a rental property primarily focuses on the property's cash flow, allowing investors to qualify without traditional income verification, unlike a conventional mortgage which is based on personal income and liabilities. C) A conventional mortgage has a higher interest rate and stricter requirements than a DSCR loan for a rental property. D) A DSCR loan for a rental property is only available for commercial properties, not residential rental properties.

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What is an ideal Debt Service Coverage Ratio (DSCR) for a lender when evaluating a DSCR loan for a rental property? A) A DSCR of 0.75, indicating the property generates 75% of the income needed to cover its debt service. B) A DSCR of 1.00, meaning the property's income exactly equals its debt service. C) A DSCR of 1.25 or higher, as this indicates the property's income is greater than its expenses, making it a strong candidate for a DSCR loan for a rental property and providing a buffer for unexpected costs. D) A DSCR of 2.00, which is the standard minimum for all investment properties, regardless of location or market conditions.

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Which of the following expenses are typically included in the calculation of the Debt Service Coverage Ratio for a DSCR loan for a rental property? A) The property's mortgage payment (principal and interest), property taxes, and insurance, which are the core components used to determine if the property can support the debt. B) The property's mortgage payment, property taxes, insurance, and the borrower's personal credit card debt. C) The property's monthly rental income and all utility bills, regardless of who pays them. D) Only the principal and interest payment of the loan, as other expenses are not considered in a DSCR loan for a rental property calculation.

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Who would most benefit from using a DSCR loan for a rental property? A) A first-time homebuyer with a W-2 salary and a high debt-to-income ratio, who is looking to purchase a primary residence. B) A seasoned real estate investor with multiple properties who wants to expand their portfolio without using personal income to qualify, making a DSCR loan for a rental property the ideal financing solution for their needs. C) Someone looking to finance a primary residence with a low down payment and a government-backed loan. D) An individual with a very low credit score who cannot qualify for any other type of loan.

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• Uses: Acquisitions, startups, working capital, commercial real estate, refinancing, inventory
• Rates: Prime + 2.25%-3.75% (varies by loan amount/term)
• Terms: Up to 10 years (working capital), up to 25 years (real estate)
• SBA Guarantee: Up to 85% for loans ≤ $150,000; up to 75% for larger loans

2. CDC/504 Loans

Designed for major asset or commercial real estate purchases: buy/renovate buildings, large equipment, or land. Combine a bank loan (50%), CDC loan (40%), and borrower down payment (10%).

• Maximum loan: Up to $5.5 million (CDC portion) in 2025
• Interest rates: Fixed, based on Treasury yields + fees (5.3%-6.8% typical range)
• Down payment: 10% (may be 15% for startups or specialized properties)
• Terms: 10, 20, or 25 years

3. SBA Microloans

Perfect for startups and microbusinesses seeking $5,000 to $50,000. Offered via local non-profits and CDFIs focusing on disadvantaged, minority, and women entrepreneurs.

• Maximum loan: $50,000
• Average Amount: $18,000 (Texas 2024 average)
• Terms: Up to 7 years
• Interest: Typically 7-13%

4. SBA Express Loans

✅ Small Business Resources 

• SBA – Small Business Administration
  https://www.sba.gov

• SCORE Mentors (Free Mentoring & Workshops)
  https://www.score.org
• Small Business Development Centers (SBDC)
  https://americassbdc.org

Are You an SBA Real Estate Loan Expert?

Test your in-depth knowledge on using SBA Loans for owner-occupied commercial Real Estate acquisition. These questions delve into the critical details that can impact your business's growth and financial strategy.

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Page 1 of 5

For an existing commercial property, what is the minimum owner-occupancy percentage required for an SBA 7(a) real estate loan, and does this specific scenario qualify?

A manufacturing company plans to acquire a 30,000 sq ft industrial real estate facility using an SBA 7(a) Loan. The company initially needs 18,000 sq ft for its operations and intends to lease out the remaining 12,000 sq ft.

A) 60%; Yes, it qualifies. B) 51%; Yes, it qualifies. C) 75%; No, it does not qualify. D) 60%; No, it does not qualify, as they are leasing out a portion.

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Which of the following sets most accurately represents additional cost categories that can typically be financed within an SBA 504 Loan for a commercial real estate project?

Hint: Beyond the straightforward purchase of a commercial real estate property, an SBA 504 Loan is highly effective for comprehensive projects.

A) Business inventory, working capital, and employee salaries. B) Building renovations, long-term machinery essential to operations within the property, and soft costs like architectural fees. C) Advertising expenses, short-term equipment leases, and utility deposits. D) Personal real estate investments, vehicles for personal use, and stock market investments.

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Between an SBA 7(a) Loan and an SBA 504 Loan, which program generally offers the lowest typical borrower down payment for a commercial real estate acquisition, and what is that common minimum percentage for established businesses?

A highly profitable professional services firm in a competitive market wants to purchase its office real estate with minimal upfront capital. The firm's owners prioritize cash flow and liquidity.

A) SBA 7(a) Loan; 15% B) SBA 504 Loan; 10% C) SBA 7(a) Loan; 5% D) SBA 504 Loan; 20%

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For new construction, what is the initial minimum owner-occupancy percentage required, and what is the maximum timeframe to meet the full owner-occupancy threshold, for an SBA Real Estate Loan?

A fast-growing tech startup plans to construct a new 50,000 sq ft headquarters using an SBA Loan. They will immediately occupy 35,000 sq ft and have a definitive plan to occupy the remaining 15,000 sq ft within two years as their team expands.

A) Initial 51%, full 80% within 5 years. B) Initial 60%, full 80% within 3 years. C) Initial 75%, full 100% within 1 year. D) Initial 51%, full 100% within 2 years.

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What is this crucial requirement, and what fundamental principle does it underscore for the lender?

When securing an SBA Loan for a commercial real estate purchase, principal owners with a 20% or greater ownership stake are almost universally required to provide a specific type of assurance beyond the collateral of the real estate itself.

A) A fixed-rate interest payment commitment, demonstrating long-term stability. B) A first-lien position on all personal assets, ensuring full recovery. C) A personal guarantee, signifying the owners' personal commitment to loan repayment. D) A business plan with projected revenue growth of at least 15% annually, showing future viability.

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Faster approval and funding—ideal for working capital, lines of credit, or equipment needs.

• Maximum amount: $500,000
• SBA Guarantee: 50%
• Approval in: 36 hours or less
• Qualification: Good credit, strong business plan

5. Export Loans

✅ Real Estate Investor Resources

• AirDNA (Short-Term Rental Data)
  https://www.airdna.co

• Rentometer (Rent Comps)
  https://www.rentometer.com
• Zillow Research & Data
  https://www.zillow.com/research

DSCR Loan IQ Quiz!

Test your knowledge of Debt Service Coverage Ratio (DSCR) loans!

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Page 1 of 3

What is the primary factor a lender focuses on when approving a DSCR loan for an investment property? a) The borrower's personal debt-to-income (DTI) ratio b) The property's ability to generate enough income to cover its mortgage payments c) The borrower's credit score history over the past 10 years d) The total number of investment properties the borrower already owns

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If a property has a Net Operating Income (NOI) of $5,000 per month and its total monthly debt service (PITI) is $4,000, what is its DSCR? a) 0.8x b) 1.0x c) 1.25x d) 5.0x

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Which type of borrower most commonly benefits from using a DSCR loan? a) First-time homebuyers purchasing a primary residence b) Investors with a strong W-2 income and minimal tax deductions c) Self-employed individuals or those with complex income who want to avoid traditional income verification d) Homeowners looking to refinance their primary residence for a lower interest rate

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Helps Texas exporters expand globally. Programs include Export Express (up to $500,000), Export Working Capital (up to $5 million), and International Trade Loans (up to $5 million).

• Eligible uses: Equipment, inventory, working capital for export sales

SBA Loan Focus: Business Acquisition in Texas (2025 Highlight)

Acquiring an existing business is one of the fastest ways to become an entrepreneur in Texas. In 2025, many retiring Baby Boomers are selling successful businesses throughout the state. SBA 7(a) and 504 loans can finance up to 90% of the purchase price, making the acquisition process more accessible. Commonly financed ventures include restaurants, service companies, manufacturing firms, logistics businesses, and medical/dental practices.

2025 SBA Loan Qualification Criteria

• Texas Business Registration: Must be an operating, for-profit entity physically located in Texas
• Credit Score: 680+ for most lenders; 650+ for microloans
• Owner Equity: Typically 10%-20% down payment or equity injection
• Business Plan: Required for startups/business acquisition, including pro-forma financials
• Collateral: Often required for loans above $350,000 but not always mandatory
• No recent bankruptcies or loan defaults
• Personal Guarantee: Usually required from 20%+ owners

Step-by-Step: Texas SBA Loan Application Process (2025)

1. 1. Evaluate Eligibility: Confirm your business meets SBA requirements and state registration.
2. 2. Prepare Paperwork:
   • Business and personal tax returns (2-3 years)
   • Year-to-date financials (P&L, balance sheet)
   • Business plan (required for startups/acquisitions)
   • Business licenses, formation docs, resumes
   • Lease or purchase agreements (real estate/acquisitions)
   • Collateral documentation (if applicable)
3. 3. Choose a Texas SBA Preferred Lender: Work with experienced banks or credit unions (see below).
4. 4. Submit Application: Your lender will guide you through SBA forms (e.g., SBA Form 1919, 413).
5. 5. Loan Review & Approval: Lender underwrites and seeks SBA guarantee. Some lenders offer express, in-house approval for expedited processing.
6. 6. Closing & Funding: Once approved, sign loan docs and disbursal typically follows within a week for 7(a)/express, longer for 504 loans.

Top Texas SBA Preferred Lenders for 2025

These banks have strong track records, rapid decisions, and deep Texas market experience:

• Frost Bank (San Antonio): Leading Texas-headquartered SBA lender, fast 7(a) decisions, strong in business acquisitions.
• Comerica Bank (Dallas/Houston): Extensive SBA program covering real estate, working capital, and export loans.
• BBVA USA (now PNC Bank, statewide): High SBA lending volume and tailored solutions for startups and minority owners.
• Live Oak Bank: National leader, very active in Texas, especially for healthcare, veterinary, and service businesses.
• Wells Fargo (Statewide): Large SBA loan team in Texas, strength in fast Express loans and healthcare practices.
• PeopleFund & LiftFund: Nonprofit microlenders specializing in startups, veterans and underserved borrowers throughout Texas.

Realistic Success Stories from Texas Entrepreneurs

• Dallas Restaurant Acquisition ($750,000 7(a) Loan): A chef used 90% SBA financing to acquire a thriving neighborhood bistro. With a 10% down payment and 10-year term at Prime + 2.5%, they preserved cash flow and tripled profits in two years.
• Houston Tech Startup ($40,000 Microloan): A software engineer received a microloan from PeopleFund to develop MVP and launch a SaaS platform. Flexible, seven-year repayment and business coaching were included.
• San Antonio Manufacturing Expansion ($3.5M 504 Loan): A family-run manufacturer purchased a larger facility. With a 10% down payment, their blended 504 rate locked in at 5.7% for 20 years, supporting both job growth and cash reserves.
• Austin Medical Practice Acquisition ($1.2M 7(a) Loan): Two young doctors acquired an established clinic, fully financed with the help of Wells Fargo’s SBA department and a 15% equity injection.
• Lubbock Equipment Financing ($160,000 SBA Express): A construction company secured quick funding for new machinery, with approval in 24 hours and a five-year fixed rate.

Texas Local SBA District Office & Resources

• Texas District SBA Office (Dallas/Fort Worth):

  4300 Amon Carter Blvd, Suite 114, Fort Worth, TX 76155
  Phone: (817) 684-5500

• Houston District Office: 8701 South Gessner Drive, Suite 1200, Houston, TX 77074 | (713) 773-6500
• San Antonio District Office: 615 E. Houston St., Suite 298, San Antonio, TX 78205 | (210) 403-5900

SBA offices provide low-cost workshops, individual business counseling, loan prep seminars, and connect you to local SCORE (Service Corps of Retired Executives), Small Business Development Centers (SBDCs), and Women’s Business Centers throughout Texas.

State-Specific Business Incentives and Economic Development in Texas

• Texas Enterprise Fund (TEF): Grants for qualifying companies creating high-impact jobs
• Texas Product/Business Fund: Flexible loans for product commercialization and growth
• Skills Development Fund: Customized workforce training grants for Texas employers
• Local Tax Incentives: Property tax abatements, franchise tax credits for eligible job creators in many counties
• Texas Small Business Development Fund: Low-interest loans for new and growing businesses

Frequently Asked Questions (FAQs) – Texas SBA Loans 2025

What if my personal credit is below 680?

You may still qualify through microloan programs or by providing additional collateral or guarantees. Local nonprofits like LiftFund and PeopleFund assist borrowers with challenged credit.

Can I use SBA loans to buy a franchise?

Yes, many lenders fund franchise acquisitions, provided the franchise is on the SBA’s Franchise Directory and you provide the required equity injection.

How long does funding take in Texas?

SBA Express loans: 2-7 days. Standard 7(a): 3-6 weeks. 504: 45-60 days for real estate or construction.

Get Started: Texas SBA Loan Checklist

• Review your business plan, tax returns, and financials
• Check Texas Secretary of State records for business standing
• Contact a preferred SBA lender
• Connect with your local SBDC/SCORE chapter for guidance
• Explore state and local incentives to maximize loan proceeds

Ready to fuel your Texas business dream? SBA-backed loans in 2025 offer affordable pathways for acquisitions, startups, expansions, and more. Tap into the state’s thriving economy and connect with financing partners who know Texas. For tailored guidance, contact your regional SBA office or leading lenders today.

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

Contact GHC Funding Today. Main: 833-572-4327 Email: sales@ghcfunding.com

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