How to Raise Money to Buy a Business in Texas (2026 Guide)
by Raises.com
To raise money to buy a business in Texas in 2026, most buyers stack three sources: an SBA 7(a) loan or bank loan for roughly 60 to 80 percent of the price, a seller note for 10 to 20 percent, and equity for the rest, either their own cash or outside investors pooled through a special purpose vehicle (SPV). Texas adds no state personal income tax on the distributions you take out, and its two SBA-heavy metros, Houston and Dallas-Fort Worth, sit inside the largest small-business lending market in the South. Raises.com builds the investor structure, the documents and the model, and introduces debt and equity sources, for a flat fee with no success fee and no carry.
Why Texas is a strong market for buying a business
- No state personal income tax, so owner distributions are taxed federally only.
- Population and job growth keep adding customers for services, construction, healthcare and logistics businesses.
- A deep in-state base of accredited investors and family offices in Houston, Dallas and Austin for the equity piece.
- Consolidators are active in home services, healthcare and industrial services, which means exit demand for a platform you build.
Lenders and programs in Texas
The senior loan on most acquisitions under $5 million is an SBA 7(a) loan, which any SBA-approved bank or non-bank lender in the state can make. It needs a 10 percent equity injection, and under the current SBA operating procedures a seller note on full standby for the life of the loan can cover up to half of that injection. Texas has SBA district offices in Houston, Dallas-Fort Worth, San Antonio, Lubbock, El Paso and the Lower Rio Grande Valley, and regional banks headquartered in the state are among the most active 7(a) lenders in the country. Above the SBA cap, private credit funds with Dallas and Houston offices lend on platform theses.
Taxes, licensing and legal points that change the deal
Texas has no personal income tax. Businesses pay the franchise (margin) tax only above a no-tax-due revenue threshold set by the Comptroller, at rates under 1 percent of taxable margin, and a buyer should confirm the target's franchise tax reports are current before the lender asks.
Trades are licensed at the state level: air conditioning and refrigeration through the Texas Department of Licensing and Regulation, plumbing through the Texas State Board of Plumbing Examiners, and electrical through TDLR. If the seller is the qualifying license holder, the transition agreement has to name who qualifies the business after close.
Where the deals are
Houston leans on energy services, industrial contractors and the Texas Medical Center; Dallas-Fort Worth on corporate relocations, logistics and new-build residential services; Austin on tech-adjacent services at higher price points; San Antonio on lower competition and attractive multiples. Smaller markets from Navasota to Lubbock carry owner-operated businesses with fewer buyers competing.
Funding sources, ranked by how often they close a deal
| Source | Typical share of price | Cost (typical, varies) | Speed | Best for |
|---|---|---|---|---|
| SBA 7(a) loan | 60 to 80% | Bank rate plus a spread; 10-year terms are common for business purchases | 60 to 120 days | Deals with steady cash flow and a buyer with relevant experience |
| Seller note | 10 to 30% | Often 5 to 8% interest, 3 to 7 years | Negotiated at the letter of intent | Every owner-operated deal; ask every time |
| Investor equity through an SPV | 10 to 40% | Preferred return plus a share of profits | 30 to 90 days once documents exist | Buyers with a deal and no down payment |
| Conventional bank loan | 50 to 65% | Bank rate, shorter amortization | 30 to 60 days | Strong personal balance sheets |
| Private credit or mezzanine | 10 to 25% | Low to mid teens all in | 45 to 90 days | Deals above roughly $1M of EBITDA |
| Seller rollover equity | 5 to 30% | The seller keeps a minority stake | At the purchase agreement | Keeping the seller invested through transition |
| Earn-out | 5 to 20% | Paid only on performance | At close | Customer or key-person concentration |
How much money you actually need
On a $2 million purchase financed with an SBA 7(a) loan, the 10 percent injection is $200,000. Up to $100,000 of it can be a seller note on full standby, so $100,000 must come from you or your investors, plus closing costs and a working-capital cushion. Lenders then test that the business's cash flow covers the new debt with room to spare; a debt service coverage ratio of at least 1.25x after your salary is the common floor. An investor SPV exists to fund exactly that last piece: you form the vehicle, sell units under Regulation D, and keep control as the manager.
Two Raises.com clients closed Texas acquisitions on this playbook: the Navasota HVAC contractor described below, and Henry Iwunze's acquisition of Integrity Health Group, a Texas healthcare services company, which he followed immediately with two further acquisitions in process.
What this looked like on a real close
In July 2026 a Raises.com client, Texas construction operator Cody Sechelski, closed the inaugural acquisition of his services roll-up: a profitable Texas HVAC contractor in the roughly $2.4 million range, funded by an institutional senior credit facility, junior debt, a seller note, seller rollover equity and a structured equity gap, with minimal sponsor cash equity. He booked his first call in October 2025, so the engagement ran about seven months. The close was covered by Yahoo Finance, AP News, Morningstar and The Globe and Mail. Raises.com has helped clients raise more than $300 million across business acquisitions, real estate and funds, with documented case studies in the clients' own words, for a flat fee with no success fee and no carry.
The plan buyers use to fund a purchase here
- Qualify the target on cash flow. Three years of financial statements and tax filings plus a trailing twelve months before anyone quotes.
- Build the model. Sources and uses, debt service, coverage, and a downside case where 10 to 20 percent of revenue walks after close.
- Design the structure. Holding entity, operating entity, and an SPV if outside investors are involved. Confirm any license the business needs will be held by a qualifying person after close.
- Run two or three lenders in parallel. A single lender that quotes three weeks and takes two months is the most common reason closings slip.
- Negotiate the seller note at the letter of intent. Rate, amortization, standby terms and subordination are easier to win before the purchase agreement is signed.
- Raise the equity gap with the private placement memorandum, subscription agreement and operating agreement in hand.
- Close with a working-capital line already approved and a retention plan for the first 100 days.
Watch: How Cody Sechelski Raised Millions to Acquire Service Businesses In Texas
Frequently asked questions
Can I get an SBA loan to buy a business in Texas?
Yes. Any SBA-approved lender can make a 7(a) acquisition loan for a business in Texas, and the state's six district offices cover every metro. You need a 10 percent injection, relevant experience or a transition plan, and coverage above about 1.25x.
How much do I need down to buy a business in Texas?
Ten percent of total project cost on an SBA loan, and up to half of that can be a seller note on full standby under the current SBA rules. The remainder can come from investors through an SPV.
Can I raise money from investors to buy a business in Texas?
Yes. Form an SPV, prepare a private placement memorandum, subscription agreement and operating agreement, and sell units under Regulation D Rule 506(b) or 506(c). Investors get a preferred return and a profit share; you stay in control as manager.
Does Texas have an income tax on the business I buy?
No personal income tax. Entities above the franchise tax's no-tax-due threshold pay under 1 percent of taxable margin; confirm the current threshold with the Texas Comptroller.
What industries are buyers acquiring in Texas?
Home services (HVAC, plumbing, electrical), healthcare services, oilfield and industrial services, logistics and distribution, manufacturing tied to reshoring, and construction trades.
Where to go next
- The full 2026 guide to raising money to buy a business, with all nine funding sources ranked.
- Buying a business with little or no money down.
- Raising the equity from investors through an SPV.
- How Raises.com structures and raises capital for acquisitions.
- Book a strategy call with one of the advisors. Pricing is on the booking page before you pick a time.