What financing options are available for small businesses in Texas’ capital? Find out about possible loans and which ones might fit your business.
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Types of business loans in Austin.
Not only is Austin the capital of the Lone Star State, but it is also an international hub of commerce and innovation with a relatively low cost of doing business compared to other high-profile cities, a diverse population, and a high survival rate for small companies. Used wisely, a business loan can empower your company to thrive in Austin.
SBA loans
SBA loans are business loans that are partially backed by the Small Business Administration (SBA), a federal agency. These loans are serviced by private lenders, but are popular because they generally have good interest rates.
Line of credit
Use a line of credit as a flexible form of financing. Unlike with a loan, this option does not involve a big disbursement upfront that you must repay, providing a flexibility that better fits many entrepreneurs’ needs.
Term loan
Term loans are common small business loans in which you would apply for a large disbursement of capital and then repays it over several years, along with fixed or variable interest.
Equipment finance
With equipment financing, you receive a piece of equipment and then pay off the cost of the equipment in installments. This way, your business can make money off the equipment immediately, even if you don’t have the funds to buy it at the sticker price.
Accounts receivable financing
Accounts receivable financing is an alternative form of business financing in which your unpaid invoices serve as collateral for a lump disbursement of funds.
Local business loan options in Austin.
Several local organizations provide small business funding resources in Austin.
If your company is working in Austin’s bustling innovation sector, Business Investment Growth Austin has multiple lending programs specifically built with your field in mind.
Texas Capital Bank is a popular Texas bank that has a strong history of commercial lending for businesses big and small.
A lender focused on bolstering communities through promoting entrepreneurship, Business & Community Lenders of Texas has a headquarters in Austin and many funding options for small businesses.
The Family Business Loan Program offers financing to businesses focused on expansion and job growth located in Austin through a partnership between the City of Austin, HUD, and private lenders.
PeopleFund is a CDFI with locations in Austin and several other cities in Texas that offers SBA (7a) and SBA microloans to businesses in low to moderate-income areas.
The Bank of Austin is a preferred SBA processing lender offering SBA 7(a), SBA Express, and SBA 504 loans.
Four simple steps to funding.
Tell us about your business.
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Submit your application.
We’ll present your application to our marketplace 75+ lenders. Applying is free and won’t impact your credit score.
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Find the funding option with the terms that best fit your small business goals.
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Once you accept, funding can hit your bank account in as little as 24 hours.
Urban Patchwork, which helps schools create spaces that connect kids to nature, faced issues with a different type of green. So its owner sought financing through Lendio.
“Lendio worked with me quickly and allowed us to get funds … and just gave us a buffer through the summer.”
Urban Patchwork's Story
Paige Oliverio started the nonprofit Urban Patchwork in 2009 with the goal of designing and building spaces that incorporate nature. But just like any other business, Paige found she had issues with a different type of green.
“People assume there is a surplus of grant cash just out there waiting to be claimed by nonprofits, but it’s not true,” she says. “It has to be run like a business. And like any business, keeping skilled staff, and the cash on hand to pay them, is hard.”
Paige persisted, eventually starting a for-profit spinoff of Urban Patchwork, working with a number of Austin-area schools to revitalize their campuses. After facing a shortage of working capital, Paige turned to Lendio for financing.
“Lendio worked with me quickly and allowed us to get funds for everything from paying off high-interest debt to hiring a new assistant,” she says, “and just gave us a buffer through the summer.”
One night, after a long day of work in the financial services industry, Trent Schneiter and his wife were discussing what life might look like if they left their jobs in finance. The thoughts were nothing more than hypotheticals at that point, but Trent surprised Jennie when he admitted that if he could, he’d love to open a restaurant.
Little did he or Jennie know that the late-night conversation would lead their life down a new path to entrepreneurship. They did their due diligence and noticed their hometown of Austin was lacking healthy food options, which has been a growing trend for years. So after looking into different restaurant concepts, they landed on poke—diced raw fish, served bowl style—and in March 2018, the two together opened Poke Austin.
Bootstrapping the Business
In order to get their business started, Trent and Jennie sold their home and cleared their savings, something 77% of business owners do. The sacrifice, they say, has been worth it.
“Being a first-time business owner and restaurateur, there is plenty we had to learn on the job,” says Trent. “Some great decisions, some just bad ones. But we love having our own business and really enjoy speaking with the customers.”
The transition and building a business from scratch has come with challenges, however. Staffing is an ongoing hurdle for the restaurant. With so much turnover in some of the entry-level positions, it has been hard for Trent and Jennie to find adequate replacements. At the same time, they found there is significant seasonality in the restaurant business. Luckily, Trent has the experience to make it work.
“Having many years of experience with finance in many different industries provided a great level of confidence to deal with the issues that come, whatever they may be,” continues Trent. “You must always know what is happening in your business. That doesn’t mean you have to be there every day, or every hour, but you need to be good at asking questions and reviewing the financials to find possible problems.”
Bookkeeping Sets Up Success
“Things that are just a little off can become a big problem if not addressed, so keep on top of it,” cautions Trent.
Businesses need cash to grow but cash flow remains a top issue for most small business owners. Not knowing what is really happening in your business, as Trent cautions fellow business owners against, is one of the biggest hurdles in acquiring funds to scale or expand. Financial documentation and a good bookkeeping service can be what comes between a business owner and their next loan.
Trent’s diligent financial records made the already-simple process of applying for funding on Lendio’s marketplace even smoother. And after an extensive review of the offers he received, Trent found the funding process to be “quick and easy.” The most difficult decision he said was choosing the timing for receiving the expansion funds.
Now, with funds in hand and construction underway on their second location, Trent and Jennie are focused on growing their operation and fulfilling their newfound dream.
FAQs
What other resources are available to Austin small businesses?
The city government of Austin has a great online resource for small businesses in Austin, whether you are just starting up or have been in business for decades. Over the years, Austin has styled itself into a bastion of innovation, entrepreneurship, and culture, and many organizations in the city want to help your business grow, including an active chapter of SCORE, a non-profit targeting small businesses, and Austin’s Small Business Development Center (SBDC), which is partnered with the SBA. A state-run initiative called the Texas Economic Development Corporation exists to connect small businesses with resources, mentorship, and networking opportunities.
What Austin small business grants are available?
The City of Austin has a Business Expansion Incentive Program for small businesses that functions similarly to a grant—by moving to Austin or hiring Austinians, your business can receive partial reimbursement for wages and property taxes. From the state government, the Texas Workforce Commission offers a Skills for Small Business Grant which is targeted
toward helping employees train and retain great workers. Small business owners in Austin and the rest of Travis County should also regularly check the list on USGrants.org
for grants from the federal government, especially if your company works in childcare or environmental conservation.
How to use an Austin small business loan?
You can use an Austin small business loan for any of your company’s capital needs—to pay bills, hire new staff, open a new location, or develop a new product.
What do I need to qualify for an Austin business loan?
Before applying for any funding in Austin, you should select a corporate structure for your business—this could be a sole proprietorship, corporation, or LLC (limited liability company). Depending on your structure, you might have to register with the Texas Secretary of State, and you should check to see if you need to register with the City of Austin as well. In some cases, you will need to apply to the Texas Business Permit Office for a business license. Once your Austin company is legal, you can apply for business loans. Each financier and type of financing has different requirements, so do your homework to determine your business’s best path forward. Lendio’s easy-to-use online platform makes comparing your options a breeze.
Often, a financier will consider your business plan, your company’s financial history, and your credit score in making an approval decision.
Ready for funding?
See what you can qualify for on the Lendio Marketplace.
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