If you own a business in Texas, there will be significant changes that may limit the way you get into working capital. Starting September 1, a new law will limit how certain lenders collect payments.
This means that some of the most flexible financing options will no longer occur today in just a few weeks.
This is changing and what it means to your business.
What is the role of the new law and why it matters
The new Texas law (House 700) is about to undergo a major change in how business financing works in Lone Star State. start September 1If you already have a premium (or “first”) loan, many lenders will no longer be able to automatically pay from business bank accounts.
Why is it important?
If you have ever used a second-place loan or cash flow financing to pay the payroll, bridge cash flow, or funding growth, you may no longer be eligible after the law goes into effect.
There are some exceptions to traditional term loans. However, for most flexible funding options that rely on automated daily or weekly payments, the new rule cuts access unless the lender is in a senior position.
In short, this means Less quotes (less choices) For many Texas businesses.
Who is most affected by the Housing Act 700?
Not every business will feel the impact of the Housing Act 700 in the same way. But for some, the September 1 landscape could make growth more challenging.
If your business relies on speed, supplemental funding, or non-bank funding sources, this law can narrow your options overnight. Even if you have never been approved before, the new restrictions may change your eligibility (and) in the coming months.
If you:
- Already have a premium loan or credit limit
- Have used second position or short-term working capital in the past
- Operating in an industry with seasonal or uneven cash flow
- Rely on fast-growing funds to bridge the gap or stay agile
- Work with alternative lenders with priority speed and flexibility
What does this mean for your business
Once the law is in effect, if you already have a loan, you can provide funds today.
But this is good news: There is still time to secure capital according to current rules. If you apply before September 1st, you can still access cash flow financing even if you already have a premium lender.
If you are considering:
- Pay seasonal costs
- Prepare for the fourth quarter
- Invest in equipment, personnel or extensions
Now it’s time to take action before the window closes.
What to do before the deadline
With new restrictions looming, it’s worth taking some simple steps to avoid packing later.
1. Check the first debt
Check out your current loan, especially SBA, banking or equipment financing. If another lender has the first UCC, it may block new funds that rely on automated businesses.
hint: Ask your lender or broker to confirm your UCC status.
2. Stress test your cash plan
Do you need additional capital to stock, staffing, or taxes in the third or fourth quarter? If so, waiting may limit your choice.
hint: Run the cash flow forecast, assuming you cannot add the second location capital after September 1.
3. Talk to the sponsor before you need it
Don’t wait until you are tight on cash. Ask now:
- Will this law affect my qualifications?
- Should I rise to the schedule?
hint: Quick check-in now saves weeks of delay.
You don’t need to rush to make a decision, but you need to be aware of the changes in the rules. Now make some plans to keep your options open later.
If you are unsure how the new law affects your situation, a quick, 15-minute call with one of our consultants can make you clear.
Don’t let capital lose its obstacles
Business financing in Texas will change significantly. Some lenders will have to adjust. Some options may disappear. However, if you understand what is going on and act early on, you will remain in control.
Whether you are actively exploring funds or just want to understand how the law affects you, this is the right time to take a closer look.
Apply now to start.
About the Author
Jake Hurley
Content Manager
With his background in his content strategy and a deep understanding of the backbone industries in the United States, Jake Hurley has spent three years helping NBC connect with the businesses it serves. His writings support customer-first messaging that is clear, feasible and never overly complex. From funding guides to strategic messaging, Jake can help turn complex financial topics into tools that are actually available to the tool.
