Frost Bank Small Business Loans Review

Frost Bank in a nutshell

Frost Bank, which provides personal and business banking to residents across Texas, is the third largest bank in the state with 140+ locations.

For business owners, Frost Bank offers term loans, lines of credit, equipment leasing, Small Business Administration loans and other options for short-term, seasonal or long-term solutions.

There are about 2.6 million small businesses in Texas, according to the SBA, making up 99.8% of businesses in the state. If you’re considering applying for Frost Bank small business loans, we’ll help you understand what the financial institution has to offer.

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Frost Bank financing details

Frost Bank, which is based in San Antonio, offers a number of financing products for business owners. Although loan amounts and repayment terms are listed online for the most part, Frost Bank would not disclose interest rates when contacted, so you’ll need to check with the institution for specifics.

Term loans

Its term loans can cover expenses like office expansions, new equipment and vehicle purchases. Loan amounts start at $5,000. Terms can be one to five years for equipment and longer for real estate, though Frost Bank does not specify the exact length. Principal and interest payments are due in regular installments on the loan, which is secured by your business’s fixed assets.

Lines of credit

A line of credit gives business owners access to funding on an as-needed basis, starting at $5,000. You could use a line of credit to meet ongoing cash flow needs or cover unexpected expenses. Payments on your variable-rate loan would be due monthly. It’s possible to secure the loan with business assets.

Equipment leasing and financing

The bank offers business owners up to 100% financing on new or used equipment with no down payment. Eligible equipment includes computers, manufacturing equipment, medical and dental equipment, and construction machinery. Business owners must seek at least $50,000 in financing. You can also choose from several equipment leases, based on whether you want full ownership:

  • Capital lease: Offers 100% fixed-rate financing and allows you to own the equipment. Repayment terms span two to 10 years.
  • Tax lease: Also called an operating lease. Lessees make rental payments to use the equipment and can either purchase the equipment for fair market value or return it at the end of the lease term.
  • Terminal Rental Adjustment Clause lease: Designed for commercial vehicles. Offers fixed-purchase or fair market value purchase options at the end of the lease.

SBA loans

Frost Bank provides loans backed by the SBA, reducing the lending risk. SBA loans typically have more favorable terms, like longer repayment schedules, than conventional business loans. It is a preferred SBA lender and could expedite your loan approval. The minimum loan amount is $25,000. Both the SBA and Frost Bank must approve the loan application. If approved, you could use an SBA loan to supplement your working capital, purchase new equipment or buy real estate.

Owner-occupied real estate loan

An owner-occupied real estate loan from Frost Bank can help business owners refinance their current commercial property. You could also use the fixed-rate, long-term loan to make improvements to your building.

Export-import financing

For Texas businesses that sell internationally, Frost Bank offers foreign loan programs. These programs can help businesses borrow against their accounts receivable or export-related inventory. Foreign buyers can also receive a loan or line of credit to purchase American-made equipment or inventory. For more details about export-import financing, you would need to speak to a banker.

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What businesses are eligible for Frost Bank financing?

Because applicants need to visit a bank branch, Texas-based business are best suited for financing. Frost Bank has branches across the state, with many locations near major cities including San Antonio and Dallas.

Some of its financing options are secured products. Businesses with significant assets to offer as collateral would likely have a better chance of being approved.

The minimum amount for both a line of credit and a term loan is $5,000. If you need less than that, you will need to seek financing from another institution.

The pros and cons of Frost Bank


  • Lower loan and line of credit amounts available to cover small purchases
  • Variety of financing options offered
  • Bankers can help with the application process


  • Must apply in person
  • Financing only available to business owners in Texas
  • Lengthy application and underwriting procedures

Application process and requirements

Business owners must bring the required information and apply for financing in person.

Frost Bank has an application available online for business owners to fill out before going to the bank. The application calls for general information about your business, such as the address, structure type and annual sales revenue. You also have to describe the collateral you plan to offer, including its market value and the amount if there are any existing liens on the assets.

You would need to supply the following documents:

  • Current and previous years’ tax returns
  • Two or three years’ worth of financial statements
  • Accounts receivable and accounts payable statements
  • Personal financial statement
  • Detailed explanation of how you plan to use the loan

Additionally, it would need entity documents that show your business structure. A corporation would need to submit articles of incorporation; a partnership would need to provide a copy of the partnership agreement; an LLC would need to submit the articles or certificate of organization; and a sole proprietorship would need to submit a copy of the filed assumed business name certificate.

If you are applying for equipment financing, you must provide a copy of the invoice or bill of sale, a description of the equipment and its serial number.

The fine print

Bank loans can be tough to get. Obtaining a bank loan can sometimes be difficult for small business owners. Traditional bank loans often have strict requirements, including healthy personal and business financial history, collateral and a detailed business plan. The underwriting process for a bank loan can be lengthy as well, and it may take more than a week to receive your funds.

Expect to provide collateral. A few of Frost Bank’s business financing options must be secured by company assets. Secured business loans tend to have more favorable rates and terms than unsecured financing. But you risk losing the assets that you used as collateral if you fail to repay your debt.

The bottom line

Frost Bank offers several financing solutions that small business owners can use to cover a range of expenses, from daily working capital costs to major equipment or real estate purchases. However, financing is only available to business owners in Texas.

Frost Bank requires applicants to meet with a banker to determine the right financial package for their business. The application itself is lengthy and asks for many details about your business, and you could be required to supply additional documentation.

Collateral is also essential for some of Frost’s funding options. You would need to offer business assets to secure a loan or line of credit, but that may work in your favor. Secured business financing typically comes with better interest rates and repayment terms than unsecured financing, which doesn’t require any collateral. You would need to apply for financing or contact Frost Bank to find out what interest rate you could receive since the bank would not disclose that information.

Bank financing is generally challenging for small business owners to secure since the eligibility requirements are usually strict and the underwriting process can take a while. But if your business is in a position to meet high bank standards and you have some time to wait for funding, Frost Bank may be able to offer the right solution for you – as long as you’re in Texas.

The information in this article is accurate as of the date of publishing