The Small Business Administration (SBA) is a U.S. government agency that approves billions of dollars in loans to small businesses every year. Most SBA Loans are issued through a bank, a credit union or other lending institution, and the SBA guarantees part of the loan. This guarantee allows banks to utilize more flexible underwriting guidelines in evaluating an SBA Loan request, since a portion of the bank’s credit risk is offset by the government’s guarantee. The guarantee amount varies depending on the size and type of loan 50%-100%.

Interest rates on SBA Loans are set by the lender, in keeping with SBA guidelines. The rate is based on the prime rate, plus an additional markup rate called the spread. Interest rates vary slightly depending on the use of funds, collateral and terms of the loan. 

Texas Capital Bank is a Preferred SBA Lender. SBA Loans require a high level of expertise to ensure a smooth application process, so you’ll want to select a lender who is a Preferred SBA Lender. This means the bank is authorized and approved to underwrite the credit application instead of submitting it to the SBA for approval, which will save time in completing the loan process. Preferred lenders are able to provide an approval 2-6 weeks faster than lenders who are not qualified as Preferred SBA Lenders. 

Not all business types are eligible for an SBA Loan. Financial institutions, life insurance providers, passive businesses (for example, investment properties) and speculative businesses (such as oil exploration) are among those who cannot secure SBA financing.

In addition, you must:

• Be a U.S. Citizen 
• Do business in the U.S.
• Operate for profit
• Meet SBA business size standards
• Have a reasonable amount of invested equity
• Have a demonstrable ability to repay the loan
• Owners with 20% or more ownership must guarantee the loan 

This list is not all-inclusive, but some of the most common approved loan purposes are:

• Business acquisition and partner buyouts
• Purchase of owner-occupied commercial real estate, including special use properties
• Building construction or expansion
• Debt refinancing
• Purchase of machinery or equipment
• Purchase of furniture, fixtures and/or leasehold improvements
• Working capital  

Preliminary Discussion

• Overview of business and loan purpose
• Interim financial statements for the business
• Three years’ business tax returns and three years projected tax returns
• Personal financial statements and tax returns
• Joint returns with spouse

At Application

• Completed loan application
• Business plan with projections and assumptions
• Accounts payables and accounts receivables aging reports
• Affiliate company information
• Copy of purchase agreement (for business purchases, real estate and partner buyout)
• Owner’s and manager’s resume

During Loan Process

• Be ready to provide additional information during the loan process. Sometimes the documentation may not paint a full picture, and the loan officer may ask for your help in filling in any gaps. 

Both financing options can help fund your business, but they work differently. Here's how Texas Capital Bank's offerings compare:

Texas Capital SBA 7(a) Loans:

• Government Backing: The US Small Business Administration guarantees a portion of the loan, reducing lender risk
• Larger Loan Amounts: $500,000 to $5,000,000 available
• Longer Terms: 10 to 25 years depending on loan purpose
• Flexible Uses: Launch new products, fund growth, acquire companies, purchase real estate, equipment, or refinance existing debt
• Fixed or Variable Rates: You choose the rate structure that works for your business
• Expert Support: Texas Capital's lending team handles processing, packaging, and application
• Lower Down Payments: SBA backing allows more flexible equity requirements
• Broader Qualification: More accessible for businesses that might not qualify for conventional financing

Texas Capital Small Business Loans: 

• Conventional Financing: Direct bank lending without government guarantee
• Smaller Loan Amounts: Up to $250,000
• Faster Processing: Quicker approval than SBA loans
• Simpler Application: Fewer requirements and documentation
• Qualification Requirements: 680+ credit score, minimum one year in business
• Flexible Terms: Customized to your business needs
• Immediate Availability: Ideal for smaller capital needs and quick funding

Bottom Line: If you need substantial capital ($500K+) for major growth, acquisitions, or real estate, Texas Capital's SBA 7(a) loans offer government-backed advantages with longer terms. For smaller needs ($15K-$250K) and faster turnaround, conventional small business loans are a solid choice.