Small Business Loans in Austin
Austin serves as the capital of Texas, and certainly is notable for that point alone. But of course, Austin has a lot more to offer to visitors and residents alike. Technically speaking, Austin is the 11th largest city in the US – something that surprises many people.
It’s larger, by population, than cities that many people assume are larger – San Francisco, Denver, Boston, Detroit, and Seattle, among many others.
It is home to a great many historical attractions, cultural institutions, and off-beat wonders, as well as internationally-recognized cuisine, festivals and events like SXSW, and an eclectic population.
Unsurprisingly, Austin has been named the #1 place to live in the US by US News and World Report in 2017 and 2018, as well as winning awards for being a safe city, great for millennials, and affordable, too.
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From the standpoint of the economy and businesses, Austin doesn’t disappoint there, either. Consistent population and economic growth over the past 2 decades has resulted in Austin becoming a major commercial center for high-tech, business, and innovation.
Dozens of household names have either their headquarters or major regional offices, manufacturing sites, or other important facilities in the greater Austin area, including Apple, Amazon, Cisco, Google, IBM, Intel, Oracle, PayPal, Whole Foods, Amazon, 3M, eBay, GM, Dell, and Texas Instruments.
These kinds of mega corporations don’t usually have the same difficulties in generating working capital as small businesses or newer businesses do, but their presence in Austin does increase the talent pool and attractiveness for small business owners to set up shop in the Austin area.
Small business loans for Austin companies are essential for the kinds of businesses that aren’t so well-established and well-known.
Funding for small businesses in today’s modern world take on a number of different forms and styles, and aren’t limited to just loans in the traditional sense.
Small business loans are joined by other small business financing options such as lines of credit, short-term loans, merchant cash advances, and debt consolidation loans, among others.
Lenders offering loans for Austin businesses generally have several of these funding options to choose from, so that business owners can best match their funding choice with the kind of expenses or projects they intend to fund.
Each different option has various pros and cons associated with it, which makes it more or less suitable for certain kinds of expenses or uses. Likewise, they each have different eligibility requirements, maximum borrowing limits, and other criteria that vary from lender to lender.
Speaking of lenders, these days, small businesses in Austin are not limited to relying on traditional financial institutions such as banks.
Instead, there are a variety of non-bank private lenders that have stepped up to fill the gaps in the market left by banks (who often don’t like to offer what they see as “risky” small business financing).
Private lenders often shape up as the better, more approachable, more useful choice for most small businesses in Austin and elsewhere, for reasons we’ll explore in more detail below.
In addition to addressing why banks aren’t always the best choice for business loans in Austin (at least for small and medium-sized businesses), we’ll first review the process of obtaining a small business loan.
Then, we’ll look at the different types of small business funding options available, and how they compare to one another.
Finally, we’ll highlight one of the leading sources of small business loans in Austin and across the US – BizFly Funding – and why they might be a good choice for your small business financing needs.
The Process of Obtaining Business Loans in Austin
It’s actually quite easy these days for many small business owners to obtain business loans in Austin – or any other kind of small business financing – provided they choose the right kind of lender.
The first step on your small business funding journey is to decide on the type of lender you are going to utilize – a bank, or a private lender.
This decision can make a world of difference in:
- The types of small business funding that you may be able to obtain
- How easy or hard is to qualify for that small business funding
- The length of time and amount of work involved in the business loan application process
- The interest rates, loan maximums, and other details associated with the small business funding option you choose
- Whether or not the small business funding will require collateral
At first glance, banks or traditional financial institutions may seem like a reasonable choice for obtaining business loans in Austin.
They’re well-known, have branch offices throughout Austin, and likely most small businesses already have checking or other accounts with one or more banks, so it should be a natural fit to add small business financing into the mix.
However, these assumptions miss out on one key fact – banks do not like risk. Banks want to ensure they grow their own bottom line, and maximize the profits they can generate on the money deposited in their savings, checking, and other depositor accounts.
Because they also can’t afford to lose that money, and must have sufficient capital to repay depositors, there are certain risk and capital covenants they must meet.
Taken together with the failure statistics for small businesses (half within the first five years of operation), small business financing is not a specialty for most banks.
Some may not offer it at all, others may have few options available, and still others may set the eligibility requirements so high that, in all practical terms, they make it virtually impossible for most business owners to qualify and obtain.
In addition, banks that do offer business loans in Texas and other states often will only provide secured loans – that is, loans that require collateral. Secured loans present less risk to banks, since the debt is “secured” by the collateral.
In other words, they are guaranteed repayment of the loan and all applicable interest and fees, even if the small business defaults or collapses, as they take ownership of sufficient pledged collateral to cover the debt.
While that’s a good deal for banks, it’s an enormous risk for small business owners – one that many companies seeking small business loans in Austin and elsewhere simply do not want to take.
That’s why most business owners prefer to go with unsecured small business loans, which don’t require collateral.
Unsecured small business loans and small business funding products are the specialty of private lenders, who are not bound by the same risk and capital covenants, since they do not offer depositor/banking accounts – only small business financing.
Private lenders have a range of additional advantages over banks that make them a compelling choice for business financing in Austin, including:
- Minimum eligibility requirements for most small business loans in Austin that are far easier to meet than those offered by banks.
These typically include lower minimum credit scores, shorter periods in business, and lower monthly revenue requirements, allowing more small businesses in need of funding to access and get approved for that funding.
- A faster application and approval process for business loans in Austin. The fact that private lenders offer unsecured small business loans mean there is no lengthy period of collateral valuation and acceptance.
In many cases, modern private lenders allow small business owners to complete the entire application process in less than an hour, with approval often granted the same day or within a few days at most.
Funding can be available in as little as 1 business day for the vast majority of customers, compared to several weeks on average for secured small business loans from banks.
- Reduced risk for small business owners looking for finance their small business, based on the nature of the unsecured vs. secured loan distinctions.
- Easier access to small business funding in Austin for businesses that have poor credit or limited credit history.
The easier-to-meet eligibility requirements can be a game-changer for many newer businesses, who often suffer with bad credit or a thin credit file.
Since banks only accept the “cream of the crop” to manage their risk, often the credit score requirements for small business loans are within the top 20% of the score spectrum.
By contrast, private lenders usually have minimum credit score requirements that encompass 40-50% of the credit score spectrum or more.
Unsecured business loans for bad credit customers in the Austin area are often the only way to obtain capital for many small businesses today.
Looking at all of these reasons should make it clear that the best option for small business loans in Austin, Texas, and all of the US is private lenders, not banks.
They specialize in small business funding, accept much greater levels of risk, offer business loans to a wider range of customers, and are far more engaged, forgiving, speedy, customer-oriented, and approachable than banks and traditional financial institutions.
Options for Financing a Small Business
Hopefully, we’ve made it clear that private, non-bank lenders are the best way to obtain your small business loans in Austin and parts beyond.
The next phase in the process, after you’ve chosen your type of lender, is to consider what kind of small business funding you need. To that end, it’s useful to understand the core differences between the different types of small business funding options that are generally offered in the US today.
This will allow you to match your particular financing needs with the kind of small business financing that will make the most sense, with terms, repayment schedules, interest rates, and maximum borrowing amounts that ensure you spend the least possible amount of money on debt service.
Of course, every type of business loan in Austin, as well as their related credit products, will have different pros and cons depending on your business needs. In the same vein, every lender will have their own sets of eligibility criteria, interest rates, and so on associated with these products.
For our purposes, we’re looking at these different kinds of small business financing options from a high level, in broad and general terms.
It’s up to each individual small business owner to seek out a lender offering terms and conditions that are competitive and aligned with their needs, ensuring they are qualified and eligible for their desired business loan or credit product with their chosen lender.
Simply put, the main kinds of small business financing that are typically available for businesses in Austin and elsewhere in the US include:
- Small business loans
Where you receive a lump sum of money when the loan is issued, and then repay it over time in equal payments, encompassing the principal and interest on the loan.
- Short-term business loans
Which are similar to small business loans but are repaid on a much shorter scale, usually months as opposed to years, which results in a faster repayment cadence of daily or weekly compared to monthly or quarterly, and less interest expense as a result.
- Small business lines of credit
Which are considered a revolving credit facility and work somewhat like a credit card (allowing you to borrow only what you need and repay it, with interest charged only on the outstanding balance), but differs from a credit card in that it provides cash rather than being limited to making purchases.
- Merchant cash advances
Also known as MCA loans, which are considered one of the best options for businesses with bad credit or a limited credit history, and provide a lump sum of cash which is repaid based on your future debit and credit card sales, at a discount, meaning the amount you need to repay in any given day, week, or month is aligned with your sales activity in that same period (usually daily).
- Debt consolidation loans
Which are small business loans not intended for general use, but rather to pay off other debts, consolidating those debts into a single loan, and resulting in savings on interest expenses and fees.
- Special small business loans for women-owned businesses
Helping to reverse the historical discrimination against women, who often have been denied access to small business funding in the past, even if identically-qualified male-owned businesses would have qualified.
- Bad credit business loans
Which are effectively small business loans as described above, but with relaxed credit score and related requirements, that enable small business funding in Austin for newer small businesses, and those who have encountered difficulties resulting in a low credit score.
BizFly Funding – Your Ideal Source for Small Business Loans in Austin, Texas, and Across the USA
By now, it should be clear that private, non-bank lenders are the way to go to secure small business loans in Austin, and that these lenders provide a range of small business financing options for you to put to work for your business.
The last and final step in obtaining funding for your small business is to pick a specific lender, fill out their application, and see how much funding you can qualify for (and what products you are eligible to obtain).
We encourage you to consider BizFly Funding as your lender for small business loans in Austin. BizFly Funding is a leading non-bank lender in the US, which exclusively provides small business lending services, focusing on the needs of the small business community.
They offer all of the various small business funding options discussed in this guide, giving you a number of choices to match against your various projects, expenses, and capital needs.
BizFly Funding can meet your business needs for loans in Austin of up to $1 million, for those who qualify.
With unsecured loans, an easy online application, fast approval, low eligibility requirements, high approval odds, fast funding, affordable rates, and outstanding customer service, BizFly Funding is redefining small business lending and expanding access to valuable financing.
Though subject to change (the latest requirements are always available on the website and as part of the application process), the basic qualification requirements for the most popular small business funding options at BizFly Funding are outlined below.
- Loan term of 2 to 36 months
- Minimum 6 months in business
- Credit score of at least 500
- $10,000 minimum monthly revenue
- Loan amounts of $5,000 to $1 million
- Interest rates of 9 to 45%
- Loan term of 6 to 24 months
- Minimum 12 months in business
- Credit score of at least 600
- $10,000 minimum monthly revenue
- Loan amounts of $15,000 to $1 million
- Interest rates of 9 to 45%
- Loan term is variable (repayment is based on sales and not tied to the calendar)
- Minimum 2 months in business
- Credit score of at least 500
- $8,000 minimum monthly revenue
- Loan amounts of $8,000 to $250,000
- Factor rates of 24 to 49%
- Credit line term is variable
- Minimum 6 months in business
- Credit score of at least 650
- $10,000 minimum monthly revenue
- Credit line amounts of $5,000 to $250,000
- Interest rates of 5 to 10%
Don’t wait weeks to get rejected by a bank, when you can get approved and funded several times over by BizFly Funding instead.
After filling out the online application for pre-approval, a team member will reach out to discuss your small business financing needs, and the options for which you qualify.
Any additional documentation will be requested, and you’ll be able to review rates, terms, loan amounts, and finalize your small business funding plan. In about 1 additional business day, you’ll have up to $1 million available and ready to be put to use as part of your business loan in Austin.
Get the capital you need to forge your own path to business success, with a little help from BizFly Funding! To learn more or to start the application process, visit BizFly Funding online at https://bizflyfunding.com.
