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Best Uses of Texas Small Business Loans to Grow Your Company

November 29, 2023

If your small business has experienced sustained success and you’re ready to expand, do you have the financial resources to take that next step?

Too often, small business owners have growth opportunities available – such as larger projects, bigger clients, or new markets – but lack the funding needed to execute their plans for growth.

For businesses throughout Texas, small business loans are available to help build your business in a variety of ways. Discover some of the best uses of Texas small business loans to expand your business, the different types of loans available, and how Texas Gulf Bank can help.

Growth Opportunities for Your Business

Small business loans are vital to fueling growth and expanding your company. Without strategic financing options available, you could be forced to pass up valuable business opportunities or burn through your available cash reserves to grow.

A small business loan can be used to improve or grow your business in a number of ways, including the following examples. 

New or Expanded Physical Locations

If your business is ready to expand your current facility or open a second location in a new region, loans can help you cover the cost of purchasing the land, building, or renovations.

Construction Loans

Does your business own real estate but still need to build a new facility from the ground up? A small business loan provides the financing needed to cover all aspects of construction, including land preparation, labor, materials, utilities, and permits.

Equipment Purchases

For small businesses that rely on specialized machinery or equipment, a bank loan can help fund the purchase of newer or larger equipment so your business is able to take on larger manufacturing or production orders. 

Working Capital Needs

If you own a seasonal business with regular revenue fluctuations, a bank loan or line of credit can be essential for covering daily operational expenses. A working capital loan or line of credit covers costs such as rent, payroll, utilities, and inventory. This type of loan can also be helpful when managing cash flow.

Technology Upgrades

Your business must stay ahead of the curve to remain competitive, and upgrading your technology can help accomplish this goal. By investing in newer and more secure technology, you gain the chance to improve efficiency, safety, and productivity.

Inventory Purchases

Companies that depend on maintaining high levels of inventory may benefit from a small business loan or line of credit. Funds can be used to purchase additional inventory during peak sales months, support higher production seasons, or take advantage of bulk purchasing discounts from vendors. 

Debt Consolidation

Small businesses typically carry debt from start-up costs, but they may have unfavorable repayment terms. Potentially, these debts might be consolidated into a single loan with a lower interest rate to improve cash flow and create more manageable monthly payments. 

Expanded Workforce

As your business grows, your workforce will likely need to grow to keep up with demand. Small business loans can be used to cover payroll increases, recruiting costs, and training programs needed to expand your staff. 

Business Promotion

As your business grows or expands into new markets, you may need financing to cover the cost of marketing and advertising to promote your business. Loans can provide the funding needed for promotional events, digital marketing, and traditional advertising products to build your brand and attract new customers.

Financing Options: Which One is Best for Your Business?

Access to financing options can empower your business to jump into larger markets and take advantage of fresh growth opportunities. However, many small businesses in Texas need access to reliable funding to make this a reality.

You may be unaware of the full menu of loan options available and which one would be the best fit for your business needs. While some business loans are intended for specific business purposes, other financing options offer flexibility in how funds can be used.

Consider how your business may be able to benefit from loan and financing options such as:

  • Commercial Real Estate Loans
  • Small Business Administration (SBA) Loans
  • Lines of Credit
  • Equipment Loans
Commercial Real Estate Loans

A commercial real estate loan allows businesses to borrow money for the labor and materials needed to fully construct a commercial building, production facility, or warehouse. These loans are short-term loans, with funds disbursed directly to builders based on a draw schedule, and may also include funding for the purchase of the land.

Businesses in need of commercial real estate loans can choose from several lending options, including:

  • Owner-occupied construction loans
  • Non-owner-occupied construction loans
  • Ground-up construction loans
  • Acquisition financing for existing businesses or properties
SBA Loans

Companies needing more robust financing options may want the flexibility that comes with SBA loans. The Small Business Administration (SBA) is a federal agency focused on supporting small business growth and community development by providing a loan guarantee on a portion of the loan amount to established small businesses. All SBA loans have SBA program-specific guidelines and requirements that must be met.

The two most popular SBA loans preferred by small businesses across the Lone Star State are the SBA 7(a) loan and the SBA 504 loan.

SBA 7(a) Loan

The SBA 7(a) loan is a versatile loan option that can be used for several key business expenses and investments, including:

  • Commercial real estate
  • Equipment purchases
  • Furniture, fixtures, and business supplies
  • Inventory
  • Working capital
  • Refinancing business debts 
SBA 504 Loan

Small businesses may also consider the SBA 504 loan, which is specifically designed to assist companies with the purchase of commercial real estate and long-term equipment.

Businesses interested in an SBA 504 loan secure their funding in conjunction with a Certified Development Company, which is a non-profit organization certified and regulated by the SBA that focuses on small business loans that improve communities and create jobs. 

Lines of Credit

For small businesses that want flexible options to finance business purchases and expenses, a business line of credit may be the ideal solution. Similar to a credit card, a line of credit enables businesses to borrow funds on an as-needed basis up to a fixed limit.

Interest accumulates on the amount used, and it can be a revolving line of credit to help manage cash flow fluctuations throughout the year.

Equipment Loans

Companies that need financing for heavy equipment or machinery purchases may be interested in equipment loans. Equipment financing is designed specifically for purchasing major equipment that would be too expensive to pay with a line of credit or current cash reserves.

Texas Gulf Bank Offers Effective Loan Solutions

If your business is on the cusp of a major expansion or growth opportunity, Texas Gulf Bank has the financing solutions to help you achieve it. With the right type of small business loan or financing option, your business may be able to achieve long-term success.

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.

To start the loan application process with Texas Gulf Bank, one of our local loan officers will discuss your funding needs, business plans, company history, and more. In addition, you will need to submit several types of financial and business documentation 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

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

Contact Us for Texas Small Businesses Loans

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

To begin the loan application process, contact Texas Gulf Bank today. We can be reached at 1-800-467-7216 or by visiting one of our many local banking centers.

We’re ready to help your business find the right lending solution. Let’s get started today on Texas small business loans.

All loans subject to credit approval.

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All Loans Subject to Credit Approval