SBA Loans Explained: Which Option is Right for Your Business?

For many entrepreneurs, access to the right financing is the key to growing and sustaining a successful business. Whether you’re looking to expand, purchase equipment, or buy commercial real estate, the U.S. Small Business Administration (SBA) offers several loan programs to support small business owners.

At SouthStar Bank, we’re proud to be an SBA-Preferred Lender, which enables us to approve loans in-house and streamline the process. If you’re searching for SBA loans in Texas, our team is here to help guide you toward the program that best fits your needs.

SBA 7(a) Loan Program

The SBA 7(a) Loan is the most popular and flexible option available to small businesses. With loan amounts up to $5 million, it can be used for a wide range of purposes, including:

Debt consolidation
Equipment purchases
Working Capital
Business acquisition
Commercial real estate purchases or construction

The extended repayment terms, often ranging from 10 to 25 years, make the SBA 7(a) loan a powerful tool for business owners seeking to manage cash flow while pursuing growth.

SBA Express Loan

The SBA Express Loan offers a faster approval process, with a more limited underwriting scope; however, this varies from lender to lender based on internal processes. While similar to 7(a) loans, Express Loans have a maximum loan amount of $500,000, but similar uses and terms are available. This program supports a Revolving Line of Credit option.

This program is ideal for Texas small businesses needing quick access to working capital or short-term financing opportunities. The SBA Express Loan combines speed with flexibility, giving you the funds to seize opportunities when they matter most.

SBA 504 Loan Program

SBA 504 Loans provide financing for owner-occupied commercial real estate and equipment, which are considered fixed assets for expansion and modernization. More specifically, this includes:

Purchasing existing buildings
Acquisition of land
Ground-up construction
Financing building improvements
Equipment acquisition
Refinance and cash-out opportunities (that meet program requirements)

As such, they offer long-term, fixed-rate financing at below-market rates. This type of loan requires a minimum down payment of 10%. An SBA 504 Loan promotes business growth and job creation by expanding capital access. This specialized program brings two separate lenders together – in this case, SouthStar Bank and a Certified Development Company (CDC). CDCs are nonprofit corporations dedicated to promoting economic development within their communities.

Other SBA Loan Options

Beyond the 7(a), Express, and 504 programs, the SBA also offers additional options to meet specialized needs:

CAPLines: Revolving lines of credit for working capital.
Export Loans: Support for businesses expanding into international markets.
Microloans: Up to $50,000 for startups or smaller capital requirements.
Disaster Loans: Assistance for businesses recovering from declared disasters.
NEW– Manufacturers Access to Revolving Credit (MARC)

These programs can provide targeted solutions for unique challenges faced by Texas business owners.

Partner with Your Local Experts at SouthStar Bank

Choosing the right SBA loan depends on your goals, timeline, and financing requirements. As a trusted SBA-Preferred Lender, SouthStar Bank has the expertise and authority to help you secure funding efficiently.

Whether you need funds to expand and grow, purchase large fixed assets, finance your operating gap due to accounts receivable, or purchase your first building, our team is ready to guide you every step of the way.

Found the right SBA Loan for your business? Have any questions? Contact our SouthStar Bank SBA experts at SBA@southstarbank.com or apply today!

Retirement Plans for Your Small Business: SEP and SIMPLE IRAs

small business owner, retirement plans, retirement plans for small business owners, sep ira, simple ira

Running a small business means wearing many hats—managing operations, building client relationships, and keeping your team motivated. One of the most important responsibilities is finding the right retirement plan for your small business. While large corporations often offer 401(k) plans, small business owners may find SEP and SIMPLE IRAs to be cost-effective, flexible retirement solutions.

At SouthStar Bank, we’re committed to helping Texas business owners build strong financial futures. Here’s what you need to know about SEP and SIMPLE IRA options for small business owners.

What Is a SEP IRA?

A Simplified Employee Pension (SEP) IRA is designed for self-employed individuals and small businesses. It’s one of the easiest retirement plans to set up and maintain, offering high contribution limits and tax advantages.

Key Benefits of a SEP IRA:

High contribution limits: For 2025, you can contribute the lesser of either 25% of the first $350,000 of an eligible employee’s compensation or $70,000.
Employer-funded: Only the employer makes contributions, which can vary each year depending on cash flow.
Tax advantages: Contributions are tax-deductible, reducing taxable income for your business.
Easy setup and administration: Minimal paperwork and no annual IRS filings make SEPs highly suitable for small businesses.

A SEP IRA is a wise choice for solo entrepreneurs or business owners who want flexibility in contributions while keeping administrative costs low.

What Is a SIMPLE IRA?

A Savings Incentive Match Plan for Employees (SIMPLE) IRA is another excellent retirement option for small businesses, especially those with fewer than 100 employees. Unlike SEP IRAs, SIMPLE IRAs allow both employers and employees to contribute.

Key Benefits of a SIMPLE IRA:

Employee participation: Employees can make salary deferral contributions, encouraging them to save for retirement.
Employer match or contribution: Employers must either match up to 3% of employee compensation or make a 2% non-elective contribution.
Lower contribution limits than SEPs: For 2025, employees can contribute up to $16,500, with an additional $3,500 catch-up contribution for those 50-59 and 64 or older. Catch-up contributions for those ages 60-63 are $5,250.
Tax savings: Employer contributions are tax-deductible, and employee contributions are made pre-tax.

SIMPLE IRAs are ideal for small businesses that want to offer retirement benefits as a tool to attract and retain talent.

Which IRA Is Right for Your Business?

Choosing between a SEP IRA and a SIMPLE IRA depends on your business size, goals, and budget. If you’re self-employed or have just a few employees, a SEP IRA offers flexibility and higher contribution limits. If you want to encourage employees to contribute to their own retirement while providing a company match, a SIMPLE IRA may be the better fit.

Partner with SouthStar Bank

At SouthStar Bank, we understand that small business owners need retirement solutions that are both practical and rewarding. Our IRA experts are happy to help you explore IRA options and determine the best retirement plan for your business and employees.

Ready to take the next step? Have any questions? Contact your SouthStar Bank IRA experts today at 512.384.3948 or IRA@southstarbank.com.

Congratulations Kimberly Moore

Kimberly Moore, Vice President & Branch Manager | SouthStar Bank Shiner

Kimberly Moore has been promoted to Vice President and Branch Manager of the SouthStar Bank Shiner branch. Kimberly has accumulated more than two decades of experience with SouthStar Bank, most recently serving as BSA and AML-CMT Officer, a vital role in fraud prevention and consumer protection. In her new role, she looks forward to being in front of the customers she has dedicated so much time to protecting, as well as engaging further with the community as a whole!

An active community advocate, Kimberly is involved in several local organizations, serving as Vice President of Shiner ISD PTO and the Shiner Band Boosters, as well as volunteering with a local Girl Scout Troop and the Shiner Junior Livestock Show. When she finds time for herself, she enjoys spending time with her friends and family, attending family gatherings and sporting events, as well as supporting her children and all their endeavors. Kim is also never opposed to a cruise or a spontaneous day trip!

Congratulations Kimberly!

The Benefits of Community Banking With SouthStar Bank

When choosing where to bank, consumers have more options than ever, ranging from large national chains to digital-only institutions. But for those who want personalized service, local decision-making, and a financial partner invested in their success, community banking is the clear choice! At SouthStar Bank, we have proudly served Texas communities for more than a century, blending modern financial tools with the warmth of traditional, hometown service.

What Is Community Banking?

Community banking means putting people first. Unlike big banks focused on national markets, community banks in Texas like SouthStar Bank are locally owned, locally managed, and committed to reinvesting in the neighborhoods we serve. This approach not only benefits individual customers but also strengthens local businesses and the overall economy of the communities they serve.

Personalized Service and Trusted Relationships

At SouthStar Bank, customers aren’t just account numbers; they’re our neighbors. Our bankers take the time to understand your goals, whether that’s buying your first home, saving for retirement, or growing a small business. By offering customized financial solutions, we ensure you have the tools and support you need to succeed. This relationship-driven approach is one of the key advantages of using a community bank over big national banks.

Local Decision-Making for Faster Results

One of the most important benefits of using a local Texas bank is that decisions are made right here in the community. At SouthStar Bank, loan approvals and account services aren’t tied up in distant corporate offices. Instead, you’ll work directly with people who know the local market and can move quickly to help you. For small businesses, this flexibility is crucial. As an SBA Preferred Lender, SouthStar Bank provides streamlined access to funding, enabling Texas small businesses to thrive.

Supporting Texas Communities

When you choose SouthStar Bank, your money stays close to home. We proudly reinvest in the places we serve, funding local businesses, creating jobs, and supporting community events. Unlike large national institutions, community banks measure success not just by numbers but by the positive impact we make on our neighbors. By banking locally, you help build stronger communities across Texas.

Modern Technology with a Personal Touch

Community banking doesn’t mean outdated banking. SouthStar Bank combines modern financial tools with hometown service. With mobile check deposit, online banking, and secure digital access, you’ll enjoy the same conveniences as a big bank with the added benefit of having a trusted local banker just a call or visit away.

Why Bank with SouthStar Bank?

Choosing SouthStar Bank means choosing:

A Texas community bank with over 100 years of service
Personalized financial guidance tailored to your needs
Faster, local decision-making
SBA Preferred Lender advantages for small businesses
A strong commitment to supporting Texas communities

At the end of the day, banking isn’t just about managing money; it’s about relationships, trust, and community. Experience the personalized, local service you deserve by contacting your local branch today!

Welcome Rosie Weaver

Rosie Weaver, Assistant Vice President & Branch Manager | SouthStar Bank Steiner Ranch

Rosie Weaver has joined the SouthStar Bank Steiner Ranch branch as an Assistant Vice President and Branch Manager. Rosie brings over three decades of experience in the banking industry to the Steiner Ranch team and customers. She excels at building strong customer relationships and helping them achieve their financial goals. Rosie is excited to bring her passion for community banking and personalized service to the SouthStar Bank family. Above all, Rosie values the community banking environment – where every customer can feel seen, heard, and appreciated. Her mission is to deliver exceptional service that keeps customers coming back.

Outside the office, Rosie enjoys spending time with her children, whom she describes as the light of her life! She is also very active in her church, serving as a Greeter at Celebration Church on Sundays and enjoying fun outings and fellowship with her Celebration Sisters Small Group. When she finds time to herself, her favorite thing to do is curl up on the couch with her dog and watch Law & Order SVU.

Welcome to the team, Rosie!

Self-Directed IRA (SDIRA) Rules You Need to Know

A Self-Directed IRA (SDIRA) can provide you with unique benefits to maximize your retirement. At SouthStar Bank, you can utilize your SDIRA to invest in options beyond stocks and bonds, including real estate, private equity, tax liens, and private loans. While there are numerous benefits to using an SDIRA, the IRS enforces strict regulations to protect your retirement savings and maintain your account’s tax advantages.

In this guide, we’ll cover the most important Self-Directed IRA rules you need to know to avoid penalties and maximize your retirement benefits.

What Is a Self-Directed IRA?

A Self-Directed IRA is an individual retirement account that allows investors to diversify their portfolios with alternative assets. Unlike traditional IRAs, which limit investments to stocks, bonds, and mutual funds, SDIRAs offer a broader range of investment options, including real estate, precious metals, private loans, and other alternatives.

Top Self-Directed IRA Rules You Must Follow

1. Account Holders Must use an IRS-approved Custodian or Trustee

Every Self-Directed IRA must be held by a qualified IRA custodian or trustee. SouthStar Bank offers custodial services to customers for their SDIRAs that have Checkbook Control-style accounts¹. This structure allows you to invest in alternative assets beyond conventional options and provides easier access to your funds compared to traditional IRAs.

2. Account Holders Must Avoid Prohibited Transactions and Disqualified Persons

The IRS prohibits certain transactions, known as prohibited transactions, involving disqualified individuals. Disqualified individuals include the IRA owner, spouse, ancestors, descendants, and controlled entities. Examples of prohibited transactions are:

Buying property from yourself or a family member
Using IRA-owned property for personal use
Lending money to yourself or related parties

Violating these rules can trigger taxes and penalties, disqualifying your IRA’s tax benefits.

3. No Self-Dealing

Self-dealing occurs when you personally benefit from your SDIRA investments outside the account. For example, living in or using real estate owned by your IRA is strictly forbidden. All income and expenses must flow through the IRA to preserve its tax-advantaged status.

4. Know What You Can and Cannot Invest In

While SDIRAs allow many alternative investments, certain assets are banned by the IRS, including:

Collectibles like art, antiques, and most coins (except specific precious metals)
Life insurance policies

Always verify investment eligibility with your custodian before proceeding.

5. Required Minimum Distributions (RMDs) Apply

If you have a traditional SDIRA, you must start taking required minimum distributions (RMDs) by age 73 (as of 2023). It’s important to note that Roth SDIRAs do not require RMDs during the owner’s lifetime.

6. Be Aware of UBTI and UDFI Tax Rules

Investments generating Unrelated Business Taxable Income (UBTI) or Unrelated Debt-Financed Income (UDFI) can incur additional taxes. For example, using leverage (non-recourse loans) to buy real estate or investing in an active business may trigger these taxes, which reduce your overall returns.

In Conclusion

Understanding the rules of a Self-Directed IRA is crucial to legally maximizing your retirement account’s growth and avoiding costly penalties. From working with an experienced custodian to steering clear of prohibited transactions, knowledge is your best defense.

Ready to diversify your retirement portfolio with alternative assets? Contact your SouthStar Bank IRA experts at ira@southstarbank.com or 512.384.3948, and they’ll be happy to answer any questions!

¹SouthStar Bank S.S.B. is an independent passive Custodian and is not associated or affiliated with and does not recommend, promote or advise any specific investment, investment opportunity, investment sponsor, investment company or investment promoter or any agents, employees, representatives or other of such firms or entities. Investments are not insured, have no guarantee, and may lose value. SouthStar Bank S.S.B. customers have FDIC bank deposit insurance for non-invested cash deposited into their Custodian Checkbook IRA account up to the standard insurance amount of $250,000 per depositor, per insured bank, for each account ownership category. The Bank follows the FDIC Insurance guidelines for custodians as outlined HERE.