Frost Bank logo

Our Take

Frost Bank is a Texas-based community bank (well, that’s a stretch. They’re a massive bank – with close to $30B in deposits, they are considered a Top 50 bank, even though all of their locations are in Texas).

They offer a full suite of products to small and medium-sized businesses – if you’re a business based in Texas, looking for a ‘local’ bank but don’t want to give up certain benefits of a national bank (like ATM access, branch locations).

Frost Bank Business Lending Products

On the lending front, they provide:

In an American Banker video, the bank claims that they are flexible on pricing, as long as you meet their credit underwriting criteria. What does that mean for you, the applicant? Put your best foot forward in the application process. If they accept you, they’ll price your loan competitively. And having someone help you shop around your loan to multiple banks helps, too.

How to Apply for a Business Loan

Here is the paperwork you need to have ready.

  • Business entity legal documents.
    • Corporation: a copy of the file stamped Articles or Certificate of Incorporation
    • Partnership: a copy of the partnership agreement or Certificate of Limited Partnership
    • LLC: a copy of the file stamped Articles or Certificate of Organization and Regulations
    • Sole Proprietorship or a General Partnership: a copy of the filed Assumed Name Certificate
  • Business Tax Returns for last two years
  • Balance sheet and income statement
  • For each owner (more than 20% of business), a personal financial statement and cash flow statement
  • Personal tax returns for last two years
  • Account Receivable / Payable aging report

In addition, if you are pursuing an equipment financing or real estate loan, specific information on the asset will also be required.

Here’s a sample of their business banking application.

The negatives

Frost Bank doesn’t make it easy to apply for a loan. They ask for a ton of documentation, and don’t disclose up-front on their website what the minimum qualifications for a loan might be.

I have some experience in consumer lending, so I understand that this is one way for Frost Bank to avoid adverse selection (i.e. really risky businesses applying for loans). But, many visitors to Legit Lender are looking for financing on a very short time frame. Frost Bank may not be the best fit for these visitors.

The positives

On the other hand, Frost Bank offers Texas business owners a lot of the benefits of a community bank or credit union alongside the branch access of a national bank. Specifically, like a good credit union, if you’re prepared for their lending process, it seems like they’ll give you a fair shake.

And, we understand that Frost Bank is willing to lend to startups (whose owners can put up enough personal collateral). It supports our thesis that startup business should first exhaust regional banks and credit unions before going to alternative lenders.

Our conclusions

If you’re planning ahead for your funding needs, and are a Texas-based business, Frost Bank and other regional banks and credit unions should be on your shortlist. Examine lenders like them before you head down the alternative lending path.

Legit Lender Score: 4.0 out of 5

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