Financing and capital solutions for small startups in Texas
With the current economy, finding capital is one of the foremost problems facing small businesses. Small businesses wishing to grow and thrive are constantly in search of foundational capital. Some are lucky to get something from local financial institutions while a majority are stuck in their financial constraints.
Over the years, the Governor’s Office Small Business division in Texas has been striving to be a viable capital solution to startups. This division is working closely with a variety of partners to highlight the various avenues for access to capital. They are attempting to make capital available to the small business community in Texas.
The following are various capital solutions available to the small business community in Texas:
Lenders or commercial banks
Financial institutions that allocate loans to borrowers are known as lenders. These can even be individuals like family and friends or a collection of people such as an organization. Lenders are options for small business owners to try to see whether they are eligible to acquire capital. Texas is home to many commercial banks with billions of dollars in deposits. Therefore, finding a lender may not be a huge problem. It is essential to carry out research and compare the different lending rates from various lenders. There are international financial institutions in Texas that may give trade-related loans to small business owners.
Texas Product or Business Fund
The Texas Product/Business Fund gives asset-backed financing to companies doing business in Texas. This does not only imply to huge businesses in Texas. The program also incorporates small businesses and provides them with the monetary resources needed for capital equipment and assets. Under this funding program, financing is given in the form of direct-based loans with competitive and favorable interest rates. Notably, one can amortize the loan up to the life of the asset. The Texas Product/Business Fund is an excellent option for small businesses that require capital-intensive equipment.
Small Business Service Provider Grant (SPG)
The Governor’s Office of Small Business Assistance has a program that enables Texas-based small business service providers with capital. The program aims to enhance and diversify projects and activities benefiting the state’s small and historically underutilized businesses (HUBs). The grant from the OSBA will give small business service providers a higher degree of flexibility and creativity. It will be an enabling factor for businesses to grow their portfolio of offering quality products and services.
Jobs 4 Texas (J4T)
Jobs 4 Texas, commonly called J4T, is an innovative program striving to increase small businesses’ access to capital. The program enables private entrepreneurs to make market-driven decisions to grow jobs. During the Great Recession, J4T was recognized as a program that boosted investment across the country at a time when capital was very hard to acquire. Most notably nowadays, J4T allocates money to venture capital firms that have little to no private capital to bring to the table.
Small Business Administration Loan Programs
The U.S. Small Business Administration offers loan programs that provide financial aid to small businesses. The SBA does this through its local SBA offices in Texas. Business owners willing to apply for financial assistance from the SBA can visit any of their offices listed below.
Houston District Office
San Antonio District Office
Lubbock District Office
Dallas / Fort Worth District Office
El Paso District Office
Harlingen District Office
Federal Grants
Primarily, the federal government provides grants for research and business development. The federal government provides information on how small businesses can obtain the grants. For instance, the government gives $2 billion to two highly competitive programs; Small Business Innovation Research and the Small Business Technology Transfer (STTR). This aims to encourage startups to capitalize on commercialization opportunities. In line with the federal grants, small businesses in Texas can receive assistance through their SBIR or STTR grant applications.
Non-Profit Lenders
Traditional for-profit lenders are not the only sources of capital for small businesses. There are varieties of non-profit lenders that provide financing and other services to small business owners. Notably, these lenders typically focus on small businesses in communities that have the potential to provide an economic impact. Usually, the lenders do this by empowering the business owners and creating jobs. There are several non-profit lenders in Texas including LiftFund, BCL of Texas and PeopleFund.
The non-profit lenders provide credit to small businesses that do not have access to loans from commercial sources. In addition, they give leadership and mentorship to small business owners to ensure they grow big. These lenders encourage small businesses to create more jobs for the community in their locality.
At Mount Bonnell Advisors, we believe that all listed capital solutions are great options for small businesses in Texas. We can also help you understand the details and requirements of each of the listed capital solutions in Texas.
