When seeking out a commercial real estate loan, one option borrowers have is to look for government-backed Small Business Administration (SBA) lenders. If you’re trying to secure a CRE loan in Texas, one of these lenders could be a great fit for your deal.
First, remember that an SBA loan is a small business loan partially guaranteed by the U.S. Small Business Administration and issued by private lenders such as banks, but backed by the federal government. There are different types of SBA loans, including SBA 7(a) loans and SBA 504 loans.
5 of the Best SBA Lenders in Texas
When looking for the best SBA lenders in a specific area, it’s a good idea to check SBAlenders.com to see who the most active lenders are by state. In Texas, for instance, the most active SBA lender is United Midwest Savings Bank.
United Midwest Savings Bank
United Midwest Savings Bank offers commercial SBA loans over $150,000. Specific lending terms vary depending on the type of SBA loan you’re looking for, but the bank connects you with a lender based on the kind of business you have.
They offer commercial SBA loans to medical practices, dental practices, optometry practices, veterinary practices, insurance agencies, the hospitality industry, funeral homes and other general industries. However, for specific terms, you need to speak with a lending agent directly. The bank does not make their terms public.
Wells Fargo Bank is another top SBA lender in Texas.
For SBA 7(a) loans, Wells Fargo offers loans up to $5 million. The loan terms are up to 25 years for commercial real estate, and the interest rates can be either fixed or variable. These loans, according to Wells Fargo, are designed for businesses looking to acquire existing business, buy out a partner, expand to another location, purchase real estate or equipment or combine any of those needs into one loan. They are recommended for longer term financing for businesses with a net worth below $15 million and an average net income below $5 million.
Wells Fargo’s SBA 504 loans, on the other hand, are designed for businesses looking to expand through land or building acquisition, construction or equipment purchase. SBA 504 loans at Wells Fargo are offered up to $6.5 million for the Wells Fargo portion and up to $5 million for the portion funded by a Certified Development Company. For commercial real estate, the terms are up to 25 years and, for machinery or equipment, up to 10 years. Interest rates can be either fixed or variable.
PNC Bank is also a major SBA lender in Texas. For SBA 7(a) loans, PNC Bank offers up to $5 million and long-term financing. According to PNC, the loan can be used to finance commercial real estate, renovations or improvements, business acquisitions, expansions or start-ups, franchise purchases, equipment or inventory, working capital or refinancing existing debt. PNC offers longer repayment terms and lower down payments than conventional bank loans, and there are no prepayment fees for loans with repayment terms less than 15 years.
PNC’s SBA 504 loans are for businesses that want to finance larger projects, like commercial real estate, heavy equipment, construction and major renovations. PNC’s SBA 504 program also includes a debt refinancing program to help businesses improve cash flow by lowering the monthly payments on conventional loan debt. Down payments for the loan can be as little as 10% of the total project cost, with up to 25-year repayment terms.
Live Oak Bank
For SBA 7(a) loans Live Oak Bank provides loans up to $5 million, with up to 90% bank financing. The loans are fully amortized, and there’s no prepayment penalties for loan terms under 15 years. Loan terms for both SBA 7(a) and SBA 504 are up to 25 years.
Regarding SBA 504 loans, Live Oak offers loan amounts up to $15 million, with a low down payment (typically 10%). Fixed or floating interest rates are available.
Comerica Bank is also a reliable SBA lender in Texas. For building real estate, Comerica offers loan terms of up to 25 years. For fixed assets, loan terms are up to 20 years. And for working capital, loan terms range from 0 to 10 years. No balloon payment is required.