Prosperity Bank Business Loan Review

Caroline Goldstein

Staff Writer at Fundera
Caroline is a small business and finance writer at Fundera. Before coming to Fundera, she received an MFA in Fiction from New York University. She loves finding creative ways to help entrepreneurs grow.

Texas- and Oklahoma-based entrepreneurs seeking business financing can add Prosperity Bank to their list of potential lenders. This Houston-headquartered institution, which serves consumers and small-to-midsize businesses, operates 234 locations across those two Southern states—and perhaps more impressively, Prosperity Bank landed the number 7 spot on Forbes’ list of America’s 100 Largest Banks. But what does a Prosperity Bank business loan entail, exactly?

Well—we can’t really tell you that. As is often the case with bank loans, Prosperity Bank doesn’t provide specifics about their business loans on their website, so interested parties will have to contact the bank directly for more information.

However, although they don’t offer details about their loans, we can run you through the major types of loans that Prosperity Bank offers small-to-medium-sized businesses. That way, you can better understand whether one of these Prosperity Bank business loans can work for your business’s needs, then visit your local Prosperity Bank branch knowing exactly which of their loans you’re ready to apply for. And if you find that you aren’t yet in the market for a Prosperity Bank business loan—or for a bank loan in general—you can explore the three alternative lending options we’ve provided here. Let’s get to it.   

Prosperity Bank Business Loan Types

Prosperity Bank offers a wide range of business loans that can suit every type of business entity, from single-person sole proprietorships to larger corporations.

Remember that your Prosperity Bank business loan eligibility, and the amount and terms of your loan—including your interest rate and repayment length—is dependent upon the information you present in your business loan application, as well as your intended use for the loan. Based on information like your credit history, annual revenue, time in business, and debt coverage service ratio, the bank determines your perceived level of risk—in other words, how likely (or not) you are to repay your loan, and the amount of debt that you can realistically handle.

For that reason—in addition to the dearth of specific information on their website—it’s not possible for us to tell you exactly what your Prosperity Bank business loan will look like. But, as we mentioned, we can certainly give you an overview of the types of loans on offer, and what each is best used for.

Business Lines of Credit

Business lines of credit function similarly to credit cards, minus the plastic: Your creditor (in this case, Prosperity Bank) provides your business with access to a predetermined amount of funds, which you can dip into whenever and in whatever amount you need. When you repay that amount, plus interest, your line of credit restores to its original amount. You’re only responsible for paying interest on the amount you pull, if you choose to pull funds at all.

All told, business lines of credit are an ideal, flexible source of financing for almost any business in any industry. They’re a great fix for cash-flow issues, seasonal fluctuations, unforeseen emergencies, or to take on unexpected opportunities. Generally, bank business lines of credit range in amount from $10,000 to $250,000.

Equipment Loans

Prosperity Bank also offers equipment financing, which enables business owners to purchase the expensive equipment they need to keep their businesses running. Note that while “equipment” can certainly refer to heavy machinery and vehicles, it might also include office furniture, supplies, software, and other essential tools of your trade or office (so long as your lender approves of it).

Typically, if they approve your application, equipment lenders (be it Prosperity Bank or another creditor) will front you the majority of the cash you need to purchase your equipment—even up to 100% in some cases, though most will lend you around 85% (you’ll provide the rest of in the form of a down payment). Then, you’ll repay your loan according to your predetermined repayment period, plus interest. Once you’ve fully paid off your loan, you’ll own the title to your equipment.

prosperity bank business loan

SBA Loans

Prosperity Bank also offers two types of SBA loans: SBA 7(a) loans and SBA 504 loans, which are the most popular of the federal agency’s several loan programs. The former can be used for several business-related purposes—including working capital, acquiring a business, or buying equipment—while the latter provides long-term financing for the purchase of real estate and other major, fixed assets.  

As a reminder, SBA loans are disbursed by intermediary lenders but are guaranteed by the Small Business Administration, a federal agency that supports the growth and creation of U.S. businesses. SBA loans are desirable for their high loan amounts, low interest rates, and generous repayment terms. And although these loans’ more flexible qualifying standards are intended to make financing accessible to business owners who may have a hard time securing conventional business loans—such as young businesses, minority business owners, and businesses in low-income areas—applicants still need to meet certain eligibility standards in order for their SBA loan application to be considered at all.     

As stated on their website, Prosperity Bank can only disburse SBA loans to businesses that meet the federal agency’s eligibility requirements, including:  

  • The business must operate for profit.
  • They must qualify as a “small business” according to the SBA’s standards.
  • They must be based in the U.S.
  • They must invest their own equity into the business, and have exhausted other business and personal financing methods.

Note that Prosperity Bank also can’t offer these loans to SBA ineligible businesses, such as charities, religious institutions, and businesses engaged in lending activities.   

On the plus side, Prosperity Bank is an SBA Preferred Lender, which means that they process, underwrite, and approve SBA loan applications in-house, rather than sending them out to the SBA. That streamlined process speeds up an otherwise lengthy application time.

Specialized Prosperity Bank Business Loans

In addition to their standard array of business loans, Prosperity Bank also offers business owners financial solutions for specialized industries or purposes:

  • Letters of Credit: Letters of credit are used by businesses that conduct international trade. This isn’t a loan, exactly. Rather, it’s an arrangement stating that the bank guarantees, on behalf of the business, that the business will fulfill its payment obligations to the international seller; and if the business isn’t capable of fulfilling payment itself, then the bank will provide that amount in the business’s stead.    
  • Farm and Ranch Loans and Lines of Credit: Prosperity Bank can also offer loans that are designed especially for farmers and ranch owners. Similarly, Prosperity Bank offers a line of credit product that’s designed to cover agricultural operating costs.
  • Energy Lending: Prosperity Bank’s energy lending program is designed for businesses in the oil and gas industries seeking funding for their unique needs.
  • Commercial Real Estate and Construction Loans: Finally, Prosperity Bank offers loans for entrepreneurs to construct, renovate, purchase, or develop commercial property.

prosperity bank business loan

Top Alternatives to a Prosperity Bank Business Loan

As we mentioned, bank loans are hard to qualify for, as banks are notoriously risk-averse. But if you can’t qualify for a Prosperity Bank business loan right now, don’t stress! You still have options, especially in the form of an online loan from an alternative lender.

Alternative lenders exist to make credit products more accessible to business owners who’ve historically been excluded from the lending space, such as young businesses, and business owners with challenged or limited credit.

On the downside, online loans can become expensive, and they typically feature shorter repayment periods than their bank loan counterparts. So while you may very well qualify for one of these loans, it’s important to crunch the numbers to ensure that you can truly afford your loan. But if you can, you may have access to funds through your online lender in as little as a single day—so any of the below loans are especially ideal options for business owners in need of immediate financial assistance.

Equipment Loan From Balboa Capital

For a quicker alternative to a Prosperity Bank equipment loan, explore Balboa Capital’s equipment financing program. Typically, qualifying business owners have a minimum of $100,000 in annual revenue, 600 credit score, and one year in business—and once they receive your full application package, they may respond with a credit decision within an hour. If you do qualify for a Balboa Capital equipment lease, you could have same-day access to your funds.

Here’s what you can generally expect from your Balboa Capital equipment financing loan:

  • Maximum loan amount: $2,000 to $500,000
  • Loan term: Two to five years
  • Interest rate: 3.99% to 25%

Note that this product is actually an equipment lease, not an equipment loan. Technically, Balboa Capital owns the title to the equipment, and you’ll pay for the use of the equipment over your repayment period term. Then, you’ll officially buy the equipment at the end of your remittance schedule.    

Business Line of Credit From Kabbage

If Prosperity Bank turned down your application for a line of credit, consider a similar financing tool from Kabbage, an online lender known particularly for their short-term line of credit product.

To qualify for a Kabbage line of credit of up to $100,000, you’ll need at least $50,000 in annual revenue, at least a year in business, and a minimum 550 credit score. However, Kabbage weighs personal credit score less heavily than most lenders do, so don’t let a struggling credit score deter you from filling out an application. (Also note that Kabbage can offer lines of credit of up to $250,000, and business owners applying for larger lines need stronger numbers in their applications.)

Here’s a quick overview of a Kabbage line of credit:

  • Loan amounts: $2,000-$250,000
  • Loan terms: Six months to one year
  • Interest rates: Between 1.5% and 10% during your first two or four months (depending on whether your loan is six or 12 months), then 1% during your remaining months. Payments are automatically collected on a monthly basis.

As is typical of online loans, Kabbage boasts an expedited underwriting and time-to-funding window: Once they receive your application, Kabbage can offer a credit decision in as little as a few minutes, or up to five business days. If approved, you’ll have instant access to your funds.

Term Loan From Lending Club

If you need access to general working capital—but you’d prefer a longer repayment period than Kabbage’s six-to-12-month terms—consider a loan through Lending Club, a non-traditional lender that offers business owners traditionally structured term loans.

Generally, Lending Club’s term loans are structured as followed:

  • Loan amounts: $5,000-$300,000
  • Loan terms: One to five years
  • Interest rates: 5.9%-25.9%

To qualify for a Lending Club term loan, business owners need a minimum of $50,000, a personal credit score of 620, and a year in business. If and when your Lending Club term loan is funded, you’ll make automatic, monthly payments. And if you’re in a position to pay off your Lending Club loan early, you can do so without worrying about incurring a prepayment penalty.

The Bottom Line on Prosperity Bank Business Loan     

All told, a Prosperity Bank business loan can be an ideal option for business owners seeking financing for any number of projects—from the general, like working capital, to the hyper-specific, like purchasing livestock and feed for their family-owned farms.

Ultimately, though, a Prosperity Bank business loan is only a viable option for the businesses that can actually qualify for a bank loan. While Prosperity Bank doesn’t disclose their eligibility requirements, if they’re like most banks we’ve seen, business owners will need to come to the table with several years of experience, strong credit scores, and high annual revenue in order for their applications to be approved.

If you’re in the majority of business owners who can’t yet qualify for a bank loan, you may want to consider a loan from an online lender—either from the three lenders we mentioned, or from any number of reputable platforms out there these days—which generally carry much less stringent eligibility standards. If you’re feeling overwhelmed by your options, work with a loan specialist to help you navigate the entire process, from exploration to application to funding.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Caroline Goldstein

Staff Writer at Fundera
Caroline is a small business and finance writer at Fundera. Before coming to Fundera, she received an MFA in Fiction from New York University. She loves finding creative ways to help entrepreneurs grow.

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