Applying for an SBA loan is one of the most common paths Texas small business owners take to access affordable government-backed financing. SBA loans are not made directly by the federal government. Instead, the SBA guarantees a portion of loans made by approved lenders, reducing the lender’s risk and enabling better terms for borrowers. This step-by-step guide covers the complete SBA loan application process for Texas businesses.
Step 1: Determine Which SBA Loan Program Fits
The SBA offers several loan programs, each designed for different business needs:
- SBA 7(a): The most versatile program, covering working capital, equipment, real estate, and business acquisition. Maximum loan amount is $5 million. 7(a) loan guide.
- SBA 504: Designed for major fixed-asset purchases such as commercial real estate and heavy equipment. Provides long-term, fixed-rate financing. 504 loan guide.
- SBA Microloan: Small loans up to $50,000 made through nonprofit intermediary lenders. Good for startups and very small businesses.
Step 2: Check Basic Eligibility
- Your business must operate for profit in the United States
- The business must meet SBA size standards for your industry
- You must have invested your own time or money in the business
- You must have exhausted other financing options or be unable to obtain credit elsewhere on reasonable terms
- The business must not be engaged in illegal activities, lending, speculation, or other excluded categories
- Business owners must not be on the federal debarment list
Step 3: Prepare Your Financial Documents
Gather the following documentation before approaching a lender:
- Personal and business tax returns for the past three years
- Year-to-date profit and loss statement
- Current balance sheet
- Personal financial statement for each owner with 20 percent or more ownership (SBA Form 413)
- Business debt schedule listing all existing obligations
- Cash flow projections for the loan term
- Business plan or business description
- Legal documents (articles of incorporation, operating agreement, business licenses)
- Collateral documentation (asset appraisals, property descriptions)
Step 4: Find an SBA-Approved Lender
Use SBA Lender Match at lendermatch.sba.gov to connect with lenders in your area that make SBA loans. You can also contact your local SBDC for lender referrals. SBA Preferred Lenders (PLP) have delegated authority to approve loans faster. Find your local SBDC.
Step 5: Complete the Application
Work with your chosen lender to complete the SBA loan application. The primary form is SBA Form 1919 (Borrower Information Form). Your lender will guide you through their specific requirements and any additional SBA forms needed.
Step 6: Underwriting and Approval
The lender reviews your application, financial documents, credit history, and collateral. Preferred Lenders can approve loans without sending the package to the SBA for review. Other lenders submit the package to the SBA for guarantee approval. Processing times vary from a few days (PLP lenders) to several weeks.
Step 7: Closing and Disbursement
After approval, you will sign loan documents and complete closing requirements including title work, insurance, and any required equity injections. Funds are disbursed according to the closing agreement.
Tips for a Stronger Application
- Get your credit report in advance and address any errors
- Prepare a clear description of how loan proceeds will be used
- Demonstrate repayment ability through strong cash flow projections
- Work with an SBDC advisor to review your loan package before submission
- Have your personal finances in order, as SBA loans require personal guarantees from all owners with 20 percent or more ownership
Get Your Program Match
SBA loans are one of many financing options available to Texas businesses. Our screening report identifies which loan, grant, and tax credit programs match your situation. Start your free screening →