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Incentives and Assistance

Community Enhancement / Entrepreneurship / Small Business Guide / Growing Your Business / Incentives and Assistance

Many federal and state incentives have been devised to support the growth and development of Texas companies. Whether they provide loan guarantees to make it easier for startup companies to secure financing, fund training for small business employees, or invest in the infrastructure needed to recruit companies from other states, these programs are designed to financially support the growth of businesses in Texas.

Financial Incentives and Financing

  • Office of Governor, Economic Development and Tourism Division
    • Product Development Fund and Small Business Incubator Fund
    • Texas Leverage Fund
    • Industrial Revenue Bond Program
    • The Texas Certified Capital Company Program (CAPCO)
    • The Capital Access Program
  • Governor’s Office of Small Business Assistance
  • Texas Produce/Business Fund
  • JOBS 4 TEXAS (J4T)
  • Private Lenders
  • Non-Profit Lenders
  • Small Business Administration Loan Programs
  • Federal Grants
  • United States Small Business Administration
    • 7(a) Loan Guaranty Program
    • SBA 504 Loan Program
    • Microloan Program
    • Surety Bond Guarantee Program

Workforce and Job Training

  • Skills Development Fund
  • Skills for Small Business
  • Self-Sufficiency Fund

Tax Incentives

  • Texas Enterprise Zone Program
  • Manufacturing Exemption
  • Value Limitation Tax Credits
  • Triple Freeport Exemption
  • Pollution Control Equipment Incentive
  • Renewal Energy Incentives
  • R&D Tax Credit
  • Data Center Tax Incentives
  • Texas Moving Image Industry Incentive Program

 

Financial Incentives and Financing

Office of the Governor, Economic Development and Tourism Division

The Office of the Governor, Economic Development and Tourism Division is the administrator of Texas’ financial assistance programs. It supports small business financing opportunities through the following loan programs:

Product Development Fund and Small Business Incubator Fund

The Product Development Fund and Small Business Incubator Fund is a revolving loan program that provides financing to assist in the development, production, and commercialization of new or improved products and stimulate the development of small businesses in the state. For more information, click here.

Texas Leverage Fund

The Texas Leverage Fund provides for business expansion, business recruitment, and exporting loans in which communities leverage future sales tax revenues. Loan amounts range from $25,000 to $5 million.  For more information, click here.

Industrial Revenue Bond Program

The Industrial Revenue Bond Program allows communities to access tax-exempt or taxable financing for specific industrial or manufacturing projects. The bond debt service is traditionally paid by the business operating the facility. For more information, click here. 

The Texas Certified Capital Company Program (CAPCO)

The Texas Certified Capital Company Program or CAPCO is designed to create private government-sponsored venture capital companies that fund Texas businesses. Only specific businesses are eligible for CAPCO funding. For more information, click here.

The Capital Access Program

The Capital Access Program focuses on “financing for businesses and nonprofit organizations that face barriers in accessing capital or fall outside the guidelines of conventional lending.” Funding secured through this program may be used for working capital, including the purchase, construction, or lease of buildings and equipment. The Capital Access Program participating lenders are LiftFund in San Antonio and PeopleFund in Austin.

Governor’s Office of Small Business Assistance

In addition to providing small businesses the resources and information they need to be successful, the Governor’s Office of Small Business Assistance (GOSBA), housed in the Department of Business Assistance at the Governor’s Office of Economic Development and Tourism, offers Governor’s Small Business Service Provider Grants (up to $10,000) to “to enhance and diversify projects and activities benefiting the State’s small businesses and Historically Underutilized Businesses (HUBs).” The GOSBA also works closely with community partners to identify resources that provide access to capital for the state’s small business community, including:

  • Texas Produce/Business Fund – This provides asset based loans with competitive lending rates. For more information, go here.
  • Private Lenders – For a list of Texas financial institutions, go here.
  • Non-Profit Lenders – This includes LiftFund, BCL of Texas, PeopleFund, and BigAUSTIN.
    • LiftFund provides credit and services to small businesses that do not have access to traditional commercial loans. They provide business loans up from $500 to $1 million. They also administer the SBA 7a loan program and the SBA 504 loan program through which they can offer loans up to $5.5 million.
    • BCL of Texas provides capital and commercial real estate loans throughout the state.
    • PeopleFund, like LiftFund, provides credit and services to small businesses that do not have access to traditional commercial loans. They also offer the SBA 7a Community Advantage Loan. They also administer a SBA 504 loan program through which they can offer loans up to $5.5 million and $5.5 million for manufacturing.
    • BigAUSTIN has dispersed laons in excess of $6.5 million and it houses the Central Texas SBA Women’s Business Center. Start ups with as little as three months of operation are eligible for loans up to $15,000.
  • Small Business Administration Loan Programs – See the United States Small Business Administration section below.
  • Federal Grants – To learn more about these financial incentives and programs, visit the GOSBA Financing and Capital page here or download the Governor’s Small Business Handbook here. You may also contact the GOSBA division at 512.936.0100 or smallbusiness@gov.texas.gov.

United States Small Business Administration

An agency of the federal government, the Small Business Administration (SBA) provides financial assistance to small business owners in Texas and across the United States through approved partnering lenders such as PeopleFund and LiftFund. The SBA supports small business loans by reducing risk to the traditional lending community through the following loan guaranty programs:

7(a) Loan Guaranty Program

7(a) Loans are the SBA’s primary business loan guaranty program. To accommodate a wide range of financing needs, the program has broad eligibility requirements, credit criteria, loan structures, loan proceeds usages, and availability. The maximum loan amount is $5 million. For more information, click here.

SBA 504 Loan Program

SBA 504 Loans provide long-term, fixed-rate, subordinate mortgage financing for acquisition and/or renovation of capital assets including land, buildings, and equipment. Loans amount range from $300,000 to $10 million. For more information, click here. You may also watch this short video about the SBA’s 504 Loan Program here.

Microloan Program

The Microloan Program provides loans up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand. For more information, click here.

Surety Bond Guarantee Program

The Surety Bond Guarantee Program is a public-private partnership between the federal government and the surety industry providing small businesses with the bonding assistance necessary for them to compete for public and private contracting opportunities. SBA guarantees bid, payment, and performance bonds issues by surety companies for individual contracts on behalf of eligible small construction, service, and supply contractors. For more information, click here.

You may learn more about how to determine your financing needs and the financing options available through the SBA by visiting the SBA Learning Center and viewing the financing self-paced courses.

 

Workforce and Job Training Incentives

Skills Development Fund

The Skills Development Fund (SDF) is an innovative program created to assist Texas public community and technical colleges to finance customized job training for their local businesses. Grants are provided to help a business, consortium of businesses, or trade union form partnerships with local community colleges and technical schools to provide custom job training. The SDF pays for the training, the college administers the grant, and businesses create new jobs and improve the skills of their current workforce.  For more information, click here.

Skills for Small Business Program

The Skills for Small Business Program is an opportunity for small businesses (less than 100 employees) to train new workers or upgrade the skills of incumbent workers. Small businesses can apply funds to training offered by their local community or technical college or the Texas Engineering Extension Service.  For more information, click here.

Self-Sufficiency Fund

The Self-Sufficiency Fund is a job-training program that is specifically designed for individuals that receive Temporary Assistance for Needy Families (TANF). The program links the business community with local educational institutions and is administered by TWC. The goal of the fund is to help TANF recipients become independent of government financial assistance. The fund makes grants available to eligible public colleges or to eligible private, non-profit organizations to provide customized job training and training support services for specific employers.  For more information, click here.

State Tax Incentives

Texas Enterprise Zone Program

The Texas Enterprise Zone Program refunds state sales and use taxes to businesses located within economically distressed areas of the state. The refund amount is predicated on the capital investment and jobs created at the qualified business site.  For more information, click here.

Manufacturing Exemption

The state’s manufacturing exemption is for sales and use taxes and is applicable for a number of expenses used during manufacturing, fabricating, and processing. The list of items is extremely broad with everything from manufacturing equipment to chemicals to machinery repairs. It even covers safety apparel and work clothing. Wrapping and packaging machinery and equipment can qualify if a manufacturer uses it to “box, label, fasten, cover, or hold the product together for sale.” The exemption also allows for certain divergent-use purposes. For more information, click here.

Value Limitation Tax Credits

The Value Limitation Tax Credits are administered through the Texas Comptroller of Public Accounts as part of the Texas Economic Development Act. The act provides for a multi-year limitation of taxable value of property as it relates to local school district maintenance and operations taxes. For more information, click here.

Triple Freeport Exemption

The freeport tax is a property tax on goods and materials used in the manufacturing process for products that will be shipped out-of-state no later than 175 days. Communities can exempt the tax by taxing entity. When all three main taxing entities (i.e., city, county, school district) offer the exemption, it is generally referred to as a “triple freeport” community. Round Rock is a triple freeport community. For more information, click here.

Pollution Control Equipment Incentive

The Pollution Control Equipment Incentive is administered through the Texas Commission on Environmental Quality, the Pollution Control Equipment Incentive provides a property tax exemption for pollution control equipment. For more information, click here.

Renewal Energy Incentives

The Renewal Energy Incentives provide tax exemptions and deductions for solar, wine, ethanol, and biodiesel. The State Energy Conservation Office (SECO) regularly lists new funding and incentive opportunities. For more information, click here.

R&D Tax Credit

The R&D Tax Credit provides sales tax exemption or franchise tax credit on qualified research and development operations. For more information, click here.

Data Center Tax Incentives

The Data Center Tax Incentives allow for a temporary tax exemption on sales and use taxes for items related to data center activities. For more information, click here.

Texas Moving Image Industry Incentive Program

The Texas Moving Image Industry Incentive Program offers a number of entertainment-related incentives. The list of qualifying projects include film and television, commercials, video game development, reality television, and visual effects.  For more information, click here.