The Benefits of a Small Business Loan

Your business’ bank account plays an important role in your company’s daily operations. It allows you to make deposits, send payments, pay employees, and more. As your business grows and evolves, so do your banking needs. Enter, small business loans.

Small business loans do a lot for businesses—and it’s more than just launching start-ups and expanding current operations. Business loans can also solve cash flow issues and consolidate debt, among other things. We’ll explain the benefits of small business loans and what you’ll need to apply.

What can I use a small business loan for?

Growing your business

Expanding your operations to an additional location? Need new equipment to keep up with customer demand? Or maybe you’re ready to create new jobs and hire more employees? A business loan can help with it all. Small business loans that can help you grow include:

  • Business Term Loans: This type of loan provides your business with upfront capital that you pay back on a fixed schedule over a designated period of time (or a term). Term loans can finance new equipment, renovate office space, and more.
  • SBA Loans: These loans are guaranteed by the U.S. Small Business Administration (SBA) and are designed to help small business owners obtain funding more easily. There are many types of SBA-sponsored loans, including microloans, 504 loans, and 7(a) loans that feature competitive terms and unique benefits—helping businesses with everything from real estate purchases and job creation to equipment repairs and capital investments.

Refinancing debt

For most business owners, the road to success usually requires investments and borrowing. But if the weight of your business’ debt is impacting your ability to pay bills and manage your business operations, it’s time to consolidate and refinance.

Just like SBA loans can help your business grow when times are good, they can also help you survive when times are tough. Refinancing your business’ debt with an SBA loan can help you consolidate debt, lower your monthly payments and your interest rate—saving you money and improving your business’ credit report.

Improving cash flow

If you’re struggling to balance your business’ cash flow, a business line of credit can be a helpful tool. You can use your line to pay employees and vendors while you’re waiting for customers to pay invoices and accounts receivable. Then, once you receive your customer payments, you can repay the line so you can use it again in the future.

At FirstCapital Bank of Texas, our Revolving Line of Credit helps you meet working capital and cash flow needs with a line of $10,000 or more. Pair it with an FCB Business Checking account, and you get convenient access to funds when your business needs them.

Tax benefits

In some cases, a small business loan can help reduce your business’ tax obligations. Your business can use the interest paid on loans to lower its taxable income. Each business’ financial situation is unique, so be sure to consult with a tax professional.

What do I need to apply for a small business loan?

While each financial institution will have different requirements, business owners can expect to provide paperwork and financials for their business loan request, including:

  • Personal & business tax returns
  • Business plans
  • Business financial statements, including balance sheets, bank statements, and cash flow reports

This information helps the lender assess your entire financial situation to provide your business with the best possible lending solutions.

Choosing a lender for a small business loan

Working with an experienced lender can make all the difference in applying for a small business loan. At FirstCapital Bank of Texas, we’re a Preferred SBA Lender—that means we have the experience and the expertise to customize a solution for your business’ unique situation.

As an SBA Preferred Lender, FCB Texas can make the final credit decisions on certain loans, which can get funding to your business faster. During the height of the coronavirus pandemic, this allowed FCB Texas to get critical funding to local businesses quickly—demonstrating our commitment to provide financing when it’s needed most.

Whether your company is well-established or just starting out, we can provide you with unique business banking solutions tailored to your needs.

Ready to see how FirstCapital Bank of Texas can help your business? Contact us.