Texas has a reputation as a lean-government state, and that reputation shapes its funding landscape in ways that catch many entrepreneurs off guard. Because Texas has no state income tax, it collects less revenue than high-tax states, which means the state offers fewer outright grant programs than, say, California or New York. There is no large state small business grant fund that writes checks to early-stage founders.
That said, Texas has one of the strongest small business funding ecosystems in the country when you count the full picture: robust SBA infrastructure, a powerful governor-level economic development fund, workforce training grants, four major cities with their own funding programs, a strong network of Community Development Financial Institutions (CDFIs), and enormous federal grant activity driven by Texas’s defense and aerospace sectors.
This guide covers every major funding channel available to Texas small business owners, from SBA loans to city-specific programs to federal SBIR grants. Sites like NerdWallet, Investopedia, and Hustler’s Library all emphasize that successful business funding requires knowing all your options before approaching any single lender or program. Here is the complete Texas picture.
SBA Programs in Texas
The U.S. Small Business Administration is the most important federal funding resource for Texas entrepreneurs. The SBA Texas district offices in Dallas, Houston, San Antonio, El Paso, and Lubbock administer the full portfolio of SBA loan programs.
SBA 7(a) Loan Program
The 7(a) program is the SBA’s flagship loan product. Loans of up to $5 million can be used for working capital, equipment, real estate, business acquisition, and debt refinancing. Interest rates are capped at the prime rate plus a spread (typically 2.25-4.75%), making them competitive with conventional bank financing. The SBA guarantees up to 85% of loans up to $150,000 and 75% of larger loans, which encourages banks to lend to businesses that might not qualify for conventional financing.
Texas has a deep network of SBA Preferred Lenders, including large regional banks like Frost Bank, Texas Capital Bank, and Prosperity Bank, as well as national SBA lenders with strong Texas presence. Preferred Lenders can approve SBA loans in-house without SBA review, which dramatically speeds up the process.
SBA 504 Loan Program
The 504 program provides long-term, fixed-rate financing for major fixed assets: commercial real estate (land and buildings) and large equipment. A typical 504 deal is structured as 50% conventional bank loan, 40% SBA/Certified Development Company (CDC) loan at a below-market fixed rate, and 10% borrower down payment. Maximum SBA/CDC portion is $5.5 million ($5.5 million for manufacturers or energy-efficient projects). Texas has multiple CDCs that administer 504 loans, including the Texas Mezzanine Fund and others.
SBA Microloan Program
For businesses needing smaller amounts ($50,000 or less), the SBA Microloan program provides funding through nonprofit intermediary lenders. In Texas, organizations like LiftFund and PeopleFund administer SBA Microloans. These loans often come with technical assistance, business counseling, and more flexible underwriting than conventional bank products.
Texas Enterprise Fund
The Texas Enterprise Fund (TEF) is the Governor’s economic development “deal-closing” fund. It provides direct cash grants to businesses that create significant numbers of jobs and make substantial capital investments in Texas. TEF has deployed over $600 million since its creation in 2003, helping attract and retain companies like Apple, Amazon, Samsung, and dozens of other major employers.
Who Qualifies?
TEF is not for small businesses in the early stage. The program targets large-scale projects: corporate relocations, major expansions, or new facilities that will create hundreds of jobs and invest tens of millions of dollars. The minimum threshold is generally 75 jobs created at above-average wages with a multi-million dollar capital investment. If you are building a business toward that scale, TEF is worth tracking as a future resource.
How to Apply
Applications are submitted through the Texas Economic Development office. Projects must demonstrate that TEF funding is necessary to choose Texas over a competing location. The deal must be approved by the Governor, Lieutenant Governor, and Speaker of the House, which means TEF is a politically visible program with a high public accountability standard.
For Smaller Businesses
While TEF itself targets large projects, the state’s Chapter 380/381 economic development agreements and enterprise zone programs operate at a more accessible scale for growing small and mid-size businesses. These are negotiated at the city and county level and can include property tax abatements, sales tax rebates, and grants for job creation.
Texas Skills Development Fund
The Texas Skills Development Fund (SDF), administered by the Texas Workforce Commission, is one of the most underutilized and genuinely valuable funding programs available to Texas employers of all sizes.
The SDF provides grants to businesses that partner with Texas public community or technical colleges to provide customized job training to new or existing employees. The grant covers training design, instruction, and materials costs. The average award is around $2,000-$2,500 per trainee, though project grants can total hundreds of thousands of dollars for large multi-company consortia.
Who Qualifies?
Any Texas business that is creating new jobs or retrenching existing employees in new skills can apply. The training must be delivered through a Texas public community or technical college. Priority is given to businesses in high-demand industries: manufacturing, healthcare, technology, energy, and construction.
How to Apply
Contact your local community college’s continuing education or workforce development office. The college will work with you to develop a training plan and submit the SDF application to TWC. Approval typically takes 4-8 weeks. This is a genuine no-strings grant: there is no repayment requirement and no equity component.
City-Level Funding Resources
Each of Texas’s four major cities has its own small business funding programs and resources, often managed through the city’s economic development office or a local SBDC. These city-specific programs frequently offer grants, low-interest loans, and technical assistance that state and federal programs do not cover.
Houston
Houston has a robust small business funding ecosystem anchored by the Houston Small Business Development Center and multiple CDFI lenders with strong local presence. The City of Houston and Harris County both have economic development programs targeting job creation in underserved communities. Read the full small business funding in Houston guide for a comprehensive breakdown.
Dallas
Dallas has several city-level funding programs, including the City of Dallas Office of Economic Development’s small business programs and a strong CDFI lending ecosystem. The North Texas SBDC network provides free consulting and connects entrepreneurs with lenders. See the full small business funding in Dallas guide for current programs and lenders.
Fort Worth
Fort Worth’s economic development office runs targeted programs for businesses in designated development areas, and Tarrant County has its own small business support infrastructure. The Fort Worth SBDC is a strong resource for first-time entrepreneurs navigating the funding landscape. Read the small business funding in Fort Worth guide for the full picture.
Austin
Austin’s funding ecosystem is particularly strong for tech startups. Capital Factory, the city’s premier startup accelerator, provides seed funding and mentorship. The Austin SBDC offers free advising and connects businesses to SBA loan programs. PeopleFund and LiftFund both operate in Austin and provide CDFI lending for underserved entrepreneurs. See our Austin small business funding guide for full details.
San Antonio
San Antonio has one of the more active city-level small business support ecosystems in Texas, including programs from the City’s Economic Development Department and Bexar County. The San Antonio SBDC and SCORE chapter are well-established resources. A dedicated guide to doing business in San Antonio covers the local funding ecosystem in detail.
CDFI Lenders and Alternative Funding in Texas
Community Development Financial Institutions (CDFIs) fill the gap between conventional bank lending and grant programs, providing flexible financing to businesses that do not yet qualify for traditional bank loans.
LiftFund
LiftFund is one of the largest CDFI lenders in the South, headquartered in San Antonio with offices across Texas. LiftFund offers small business loans from $500 to $1 million with flexible underwriting standards. They are an SBA Microloan intermediary and also have their own loan products for businesses that cannot access bank financing. LiftFund also provides business development services, including financial coaching and accounting assistance.
PeopleFund
Austin-based PeopleFund serves small businesses across Texas, with a focus on underserved communities. They offer loans up to $350,000 and have programs specifically designed for women-owned, minority-owned, and veteran-owned businesses. PeopleFund is also an SBA Microloan intermediary.
Accion Opportunity Fund
Accion Opportunity Fund operates across Texas, providing small business loans from $5,000 to $250,000. They are particularly focused on minority and immigrant entrepreneurs who may face barriers to conventional bank lending. Accion’s online application process is faster than many traditional lenders.
Texas Mezzanine Fund
The Texas Mezzanine Fund focuses on small businesses in underserved markets, providing SBA 504 loans and other financing products. They work primarily with businesses in low-to-moderate income areas and those owned by women, minorities, and veterans.
Federal Grants Available to Texas Businesses
Texas businesses in the technology and defense sectors have access to significant federal grant funding through programs that most small business owners overlook entirely.
SBIR and STTR Programs
The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs collectively represent more than $4 billion in annual federal R&D funding set aside for small businesses. Eleven federal agencies participate, including the Department of Defense, NASA, NIH, and the Department of Energy.
Texas businesses are extraordinarily well-positioned for SBIR/STTR because of the state’s massive defense and aerospace presence. The Department of Defense alone awards roughly $1.5 billion in SBIR/STTR grants annually, and businesses near Fort Worth’s Lockheed Martin ecosystem, Houston’s NASA complex, or San Antonio’s JBSA installations have natural domain expertise and proximity to the contracting officers who manage these programs.
Phase I SBIR awards are typically $50,000-$250,000 for feasibility studies. Phase II awards go up to $750,000-$2 million for full R&D development. Phase III is commercialization: no grant funding, but the government can contract with you directly without competitive bidding if you developed the technology under SBIR/STTR.
How to Apply for SBIR/STTR in Texas
Each agency publishes solicitations on SBIR.gov. Texas SBDC advisors and the Texas A&M Engineering Experiment Station’s Technology Commercialization office provide free assistance to Texas businesses pursuing SBIR/STTR funding. If your business does any kind of technology development, this program deserves serious attention.
Ready to map out your Texas funding strategy? Hustler’s Library covers SBA lenders, CDFI programs, city-specific grants, and federal funding in a single resource library built for serious entrepreneurs. Join Hustler’s Library free and find funding faster.
