If you own a business in Texas, there’s a major change coming that could limit how you access working capital. Starting September 1, a new law will restrict how certain lenders can collect payments.
That means some of the most flexible financing options available today may no longer be possible in just a few weeks.
Here’s what’s changing—and what it means for your business.
What the new law does, and why it matters
A new Texas law, House Bill 700, is about to make a major shift in how business financing works in the Lone Star State. Starting September 1, many lenders will no longer be able to auto-debit payments from your business bank account if you already have a senior (or “first-position”) loan in place.
Why does that matter?
If you’ve ever used a second-position loan or cash flow financing to cover payroll, bridge cash flow, or fund growth, you may no longer qualify after the law takes effect.
There are some exceptions for traditional term loans. But for most flexible funding options that rely on automated daily or weekly payments, this new rule cuts off access unless that lender is in the senior position.
In short, that means fewer offers (and fewer options) for many Texas businesses.
Who’s most affected by house bill 700?
Not every business will feel the impact of House Bill 700 the same way. But for some, the post-September 1st landscape may make growth more challenging.
If your business relies on speed, supplemental funding, or non-bank funding sources, this law could narrow your options overnight. Even if you’ve never had an issue getting approved before, the new restrictions could change how (and if) you qualify in the months ahead.
This change is especially relevant if you:
- Already have a senior loan or line of credit in place
- Have used second-position or short-term working capital in the past
- Operate in an industry with seasonal or uneven cash flow
- Depend on fast-turnaround funding to bridge gaps or stay agile
- Work with alternative lenders who prioritize speed and flexibility
What this means for your business right now
Once the law takes effect, funding that’s available to you today may be off the table if you already have a loan in place.
But here’s the good news: There’s still time to secure capital under current rules. If you apply before September 1, you can still access cash flow financing, even if you already have a senior lender in place.
If you’re thinking about:
- Covering seasonal costs
- Preparing for Q4
- Investing in equipment, staff, or expansion
Now is the time to act, before the window closes.
What you can do before the deadline
With the new restrictions looming, it’s worth taking a few simple steps now to avoid getting boxed out later.
1. Check for First-Position Debt
Review your current loans, especially SBA, bank, or equipment financing. If another lender holds a first-position UCC, it may block new funding that relies on auto-debit.
Tip: Ask your lender or broker to confirm your UCC status.
2. Pressure-Test Your Cash Plan
Will you need extra capital for inventory, staffing, or taxes in Q3 or Q4? If so, waiting could limit your options.
Tip: Run your cash flow forecast assuming you can’t add second-position capital after September 1.
3. Talk to a Funder Before You Need One
Don’t wait until you’re tight on cash. Ask now:
- Will this law affect my eligibility?
- Should I move up my timeline?
Tip: A quick check-in now could save weeks of delay later.
You don’t need to rush into a decision, but you do need to be aware of how the rules are changing. A little planning now could keep your options wide open later.
If you’re unsure how the new law might affect your situation, a quick, 15-minute call with one of our advisors can give you clarity.
Don’t let capital slip out of reach
Big changes are coming to business financing in Texas. Some lenders will have to adjust. Some options may disappear. But if you understand what’s happening and take action early, you’ll stay in control.
Whether you’re actively exploring funding or simply want to understand how the law could affect you, this is the right time to take a closer look.
Apply now to get started.
ABOUT THE AUTHOR
With a background in content strategy and deep knowledge of America’s backbone industries, Jake Hurley has spent three years helping NBC connect with the businesses it serves. His writing supports client-first messaging that’s clear, actionable, and never overcomplicated. From funding guides to strategic messaging, Jake helps turn complex financial topics into tools business leaders can actually use.