A New Texas Law Could Make It Much Harder for Small Businesses to Access Funding

A new law passed by the Texas state legislature could seriously impact how small businesses access the capital they rely on to stay afloat. For thousands of hardworking entrepreneurs across the state, this change could mean fewer funding options, longer wait times, and a greater struggle to simply keep operations running.

This legislation, set to take effect on September 1, 2025 (unless vetoed by the governor), directly targets sales-based financing, one of the most accessible forms of capital for businesses that don't qualify for traditional bank loans.

What This Means for You

If your business has ever used merchant cash advances (MCAs) or similar revenue-based financing, you’re likely familiar with how they’ve helped bridge slow months, fund equipment purchases, or cover payroll during unpredictable seasons. But now, those lifelines are being cut off.

The new law says that:

• Funding providers can't auto-deduct from your account unless they hold a first-priority security interest, meaning they have to be your only or top lender.

• Only banks and a select few entities are exempt, leaving small business owners with fewer options and less competition among funders, which usually leads to higher costs and tougher terms.

How Does This Impact Small Business Owners

• If your business relies on fast, flexible capital, especially when banks say no, this law may take those options off the table.

• If you have existing financing or need more than one source of capital, you could be blocked entirely.

• As fewer alternative funders stay active in Texas, the market will shrink, and terms will likely worsen for businesses that do qualify.

Instead of helping small businesses, this could leave many stranded, just when they need funding the most.

What Can You Still Apply For?

While this new law restricts your ability to access many alternative funding options, you still have options available.

SBA loans are still available, and they remain one of the most reliable, affordable ways for established businesses to secure long-term capital. At Capital Infusion, we continue to provide access to SBA loans for qualified Texas businesses.

To be eligible, your business must meet the following criteria:

• Minimum annual revenue of $100,000

• At least 3 years in business

• Personal credit score of 650+

• Business credit score of 145+

• No bankruptcies, liens, or active judgments

If you meet these requirements, Capital Infusion can guide you through the SBA loan process, helping you access the funding needed to support your growth, stability, or recovery, even as the financing landscape shifts. Apply now and see what your Texas business qualifies for today!

Apply Now