For a business to be successful, it needs immediate access to funds.
How easy is it to get a Texas small business loan?
According to the Federal Reserve Bank of Dallas’ Small Business Credit Survey: Texas Business 2019 Report, many businesses are struggling to get the money they need. Only 42% of the businesses received the cash they requested from banks or other financial institutions.
What about the remaining 58%? Did they get the funds they needed? Or did these companies lose out due to lack of credit?
In this article, we’ll take a closer look at business loans in Texas. We’ll tell you what Texas entrepreneurs spend their capital on and what they can do if their loan applications are rejected.
The economy of the state of Texas was the fourth fastest growing economy in the rank or top quintile of the ranking of the economies of the nation’s states
We will also tell you how you can find a great solution for all your financial needs.
Texas Business Loans: Why Are They Hard To Get?
Why are 58% of Texas small business loan applications not approved or only partially approved?
According to the Texas Small Business Needs Assessment Survey, the top reasons applicants cannot access Texas business loans are:
- The company was recently created
- The applicant had a low credit score
- Applicant was unable to provide adequate collateral
We can also talk about the Small Business Administration (SBA) business loans, which although they are usually cheap, it is very difficult to access them, since they have many very strict requirements and the approval process is very long (it can take several months).
Texas small business loan options
Is there an easy financing alternative to obtain?
Fortunately, there is an easy solution for entrepreneurs seeking Texas business loans.
The state of Texas has several competitive advantages over other states of the American union. These include the following aspects.
Texas is the 15th largest economy in the world based on gross domestic product. The size of its economy is compared to countries like Mexico and South Korea.
Texas Business Loans: What Is Principal Used For?
When a business takes out a small business loan in Texas, what does it do with the funds it borrows?
Dallas Feds says 67% of applicants seek loans to expand their business or finance a new business opportunity. Here are some of the specific ways you can use business loans in Texas:
- Purchase of machinery and equipment
- Inventory purchase
- Meet payroll expenses
- Create a new marketing campaign
- Launch a new product or service
- Open a new location
The importance of business in Texas
The SBA notes that there are 2.7 million small businesses in Texas. These represent 99.8% of the total in the state. These companies employ 4.7 million workers, representing 45.1% of all employees in Texas.
And while the importance of small businesses is undeniable, many of them suffer from a lack of capital.
Business loans are needed
A look at the April 2017 Texas Small Business Needs Assessment Survey reveals that just under 40% of entrepreneurs experience difficulty receiving the amount of credit requested.
Minority and female business owners are nearly 8 percent more likely to use personal savings than non-minority counterparts. And although more than half of the MWBE depend on credit cards as the main source of financing
Maritime transport plays a preponderant role in the economic development of a country. The state of Texas has seaports such as Houston, Beaumont, Corpus Christi and Texas City, allowing a large flow of international trade. Of the top 10 seaports in the United States, 4 are located in Texas.
Tax and government, Texas has flexible policies, which makes it an attractive place for foreign investors due to its wide range of laws that benefit the investing partner to do business.
The state of Texas has the second largest population in the US after California. In the last ten years, the state of Texas has increased its population while other states with strong economies such as New York and California have begun to lose population.
That’s why Texas continually ranks as the best state for business. CEOs moving to Texas cite the differences as «day and night» when it comes to improved quality of life and good schools, along with a prepared workforce.
Lower energy costs, along with lower land costs and fewer land use restrictions, also mean lower operating costs for businesses and a lower cost of living for their employees.
The impact of COVID-19
The negative impact that the credit shortage has created has been compounded by the COVID-19 pandemic. Texas entrepreneurs in most industries have seen their income drop sharply. Additionally, many are facing permanent closure due to lack of funds.
Business owners are accessing online platforms to acquire debt with supporting financing needs. While access to online platforms has its advantages. For many months, too many Texans have been denied the opportunity to work, too many small business owners have struggled to pay their bills.