Texas Capital Bank is a commercial bank that has its headquarters in Dallas, Texas. The bank also has locations all over Texas, and its total assets are worth more than 40 million dollars. The parent organization of Texas Capital bank is Texas Capital Bancshares, INC.
Texas Capital bank also offers several lending and financial solutions for businesses, such as SBA loans. Below we have discussed the SBA loans offered by Texas Capital bank.
19.SBA (7A)
- Loan Amount: 500,000 to 5000,000 dollars
- Term: 25 years (10-year amortization)
- Down Payment: 100 % financing available
- Loans can be used to purchase equipment, supplies, material real estate, and other properties can also be purchased with the help of this loan.
- The loan can be used for construction, refinancing a debt acquiring a business, and business expansion.
- Fixed and Variable rate
- SBA guarantee fee (can also be financed)
- Loan structure: 90% bank loan, low borrower down payment of 10%
20.SBA/CDC 504 Loan Program
- Lower down payments
- Term: 15 years for real estate, ten years for equipment and machinery
- Amount: 15 million dollars
- Purpose: Provides financing for long-term purposes at a fixed rate to fund business expansions. The loans also support economic development so that more jobs are created.
- Fixed and Variable rate
21.Paycheck Protection Program (PPP) Loan Forgiveness
Loans are only considered forgivable if the businesses/borrowers meet the retention criteria and have used the funds for payroll, expenses, and mortgage costs, during the 8 to 24 week disbursement period. In that case, the loan interest rate will be 1%. Some PPP loans mature in two years while others mature in five years, and they require no personal guarantee and collateral.
Types of Loans offered by Texas Capital Bank
1. SBA (7A)
- Loan Amount: 500,000 to 5000,000 dollars
- Term: 25 years (10-year amortization)
- Down Payment: 100 % financing available
- Loans can be used to purchase equipment, supplies, material real estate, and other properties can also be purchased with the help of this loan.
- The loan can be used for construction, refinancing a debt, acquiring a business, and business expansion.
- Fixed and Variable rate
- SBA guarantee fee (can also be financed)
- Loan structure: 90% bank loan, low borrower down payment of 10%
2. SBA/CDC 504 Loan Program
- Lower down payments
- Term: 15 years for real estate, ten years for equipment and machinery
- Amount: 15 million dollars
- Purpose: Provides financing for long-term purposes at a fixed rate to fund business expansions. The loans also support economic development so that more jobs are created.
- Fixed and Variable rate
- 50 % bank loan, 40 % CDC loan, low borrower down payment of 10%
3. Paycheck Protection Program (PPP) Loan Forgiveness
- Loans are only considered forgivable if the businesses/borrowers meet the retention criteria and have used the funds for payroll, expenses, and mortgage costs, during the 8 to 24 week disbursement period
4. Business Loans
Small businesses are a major component of the economy; Texas Capital bank aids small businesses and helps them get on their feet. Texas Capital bank has a wide array of deposit products that are designed to help small businesses grow. The bank can provide capital of up to 750,000 dollars to small businesses. The purpose of this loan is:
- Commercial real estate
- Machinery and equipment
- Business acquisitions
- Working capital
- Refinancing of debt
- Leasehold improvements
- Furniture
- Fixtures
Texas Capital Bank Interests, Fees, and Loan Options
60.SBA (7A)
- Interest Rate: 4.25 % for < 25,000 dollars, 3.25 % for 25,0001 to 50,000 dollars, 2.25 % for > 50,0001
- Fees: 0.25 % (short-term loan) 3.5 % (1000,000 dollars)
61.SBA/CDC 504 Loan Program
- Interest Rate: 2.4 % (Ten-year term), 2.35 % (25-year term), 2.41 % (also for 25-year term)
- Fees: 0.25 % (Loan servicing) 0.5 % (SBA Guarantee)
62.PPP Loan Program
- Interest Rate: 0 % if the loan is forgiven, 1 % if the loan is not forgiven (as of August 2021)
- Fees: None
63.Business Loans
- Interest Rates: Not Specified
- Fees: Not Specified
What Lending Criteria does Texas Capital Bank Have?
Below is the basic lending criteria that all the banks follow:
- Credit Score
- Annual Revenue
- Business Plan
- Collateral
- Time in Business
Credit Score
Credit is the most important component of all types of businesses, whether they are small or large. Lenders will always analyze the business's credit score and then decide whether it can pay the loan or not. Therefore, the best way to maintain a healthy credit score is to pay your dues on time.
Credit scores can also be easily obtained from several agencies such as Equifax, Dun & Bradstreet, and Experian. Another way of maintaining a positive credit score is to have a low debt-to-income ratio. Lenders will not invest in businesses that don't have a good credit score.
Annual Revenue
Another important factor that the lenders will review is the annual revenue of the business. Most lenders will only lend to those businesses that have been profitable for the last two years or more. Businesses need to make sure that all the financial statements are accurate and up to date.
Lenders will also look at specific details such as the current account (current assets divided by liabilities) and ask for copies of bank statements and transactions. However, businesses will only be eligible for a loan if their cash flow is growing.
Business Plan
A minority of lenders might not ask for a business plan, but most of them do, and businesses need to come with a clear and concise proposal. Usually, lenders require the business plan to know the purpose of the loan and discuss the business's stability.
One of the main components of business plans is the resumes of managers and staff. However, despite having a clear business proposal, the lenders will still ask for proof of the staff's ability and relevant credentials and experience.
Collateral
Collateral is an essential requirement, and most lenders will not provide a business loan if it cannot give collateral. Collateral can be anything like equipment or property. The collateral will also decrease the risk for the lender as it will have an asset in hand, so if the company fails to pay the loan, the collateral can be paid to fund the damages.
The owner of the company needs to provide a personal guarantee and will also need to submit some essential documents:
- Driver’s license
- Business license
- Tax returns (personal)
- Tax returns (business)
- Insurance plans of business
- Records for payroll
- Detail of owner
- Other financial obligations
Time in Business
Most banks are hesitant to lend loans to new companies that have been active for just a few months. Lenders cannot trust small businesses or startups that have just entered the market because they don't have a proper credit score and the cash flow is usually unstable. Banks will most likely lend to businesses that have been active for more than two years.
Loan Forgiveness Criteria
In Round 2 of the PPP loan program, the criteria for forgiveness were also revised. Under the new changes, the businesses/borrowers spent 60 % instead of 75 % of the loan on their business needs (payroll expenses, mortgage costs, rent).
Eligibility Criteria for Paycheck Protection Program
Following borrowers qualify for loan forgiveness during the 8 to 24 period of loan disbursement:
- Compensation and employee levels are maintained
- 60 % of the funds are business expenses such as payroll costs
Loan Forgiveness Criteria
In Round 2 of the PPP loan program, the criteria for forgiveness were also revised. Under the new changes, the businesses/borrowers spent 60 % instead of 75 % of the loan on their business needs (payroll expenses, mortgage costs, rent).
Texas Capital Bank Application
Following is the application procedure of all the banks that borrowers have to follow:
Before you apply for a loan, ensure that all your documentation is up to date. Also, organize all the documents properly, and if some essential documents are missing, contact the relevant authorities. Collect all the financial information about your business and pay all the dues as soon as possible.
- Personal and Business credit scores and history
- Account statements of the business
- IRS documents, tax returns of the business, and the owner as well.
- Other important financial documents such as unpaid invoices, credit card details, and accounts receivable.
- Legal contracts (leasing, franchising, incorporation)
For more information, check out the website of Texas Capital bank.
Requirements for SBA Loans
- SBA loan package application
- Business should be active for at least three years
- Submit tax returns
- A breakdown of the financial information about the business
- Detailed information regarding how the funds will be utilized
- Copy of sales, construction contracts, sales, and other transactions
- For startup business: a business plan
For more information on SBA loans, click here.
Summary of Texas Capital Bank Loan Options
Texas Capital bank is a firm believer in small businesses, as it considers them an essential part of the economy. The bank was founded in 1968; it operates in all the major areas of Texas and has total assets worth 40 billion dollars. Below is a list of all the loans provided by Texas Capital bank:
- PPP Loan forgiveness
- SBA 7(A) Loan
- SBA/CDC 504 Loan Program
- Business Loans
As always, please go through the eligibility criteria, especially for SBA and PPP loan forgiveness, make sure you have all the necessary documents, and if you don't, then please get in touch with the bank.