About this programme
The Texas Small Business Credit Initiative (TSBCI) is the state's implementation of the federal State Small Business Credit Initiative (SSBCI), reauthorized under the American Rescue Plan Act on March 11, 2021. The federal program provides $10 billion across all states to help small businesses access capital for job-creating investment, with a particular focus on underserved communities.
Texas received an allocation of up to $472 million from the U.S. Department of the Treasury. It is administered by the Economic Development Finance Division of the Economic Development & Tourism Office (EDT) in the Office of the Governor.
TSBCI does not lend money directly to businesses. Instead, it works through participating financial institutions (banks, credit unions, and Community Development Financial Institutions) to make it easier and less risky for them to lend to small businesses that would otherwise struggle to get capital.
How it works
The $472 million allocation is split between two programs: the Capital Access Program (CAP), up to $118 million, and the Loan Guarantee Program (LGP), up to $354 million.
Under CAP, the financial institution and the borrower each contribute an equal amount into a loan loss reserve fund, and the state matches the combined contribution. The lender can draw on that reserve account to cover losses if the loan is charged off, recovering up to 100% of the charged-off principal. CAP loans run from $5,000 to $5 million.
Under LGP, the state guarantees up to 80% of the unpaid principal on enrolled loans, encouraging the lender to extend credit it otherwise would not. LGP loans run from $5,000 to $20 million.
Loan Participation Program (LPP) options also exist: the Loan Purchase Participation Program (LPPP), where the state purchases up to 50% participation interests in qualified loans, and the CDFI Direct Lending Program (CDLP), which gives CDFIs direct loans at a fixed 1% interest rate for terms of up to nine years.
TSBCI charges no fees to the borrower or the lender, though the lender may still apply its own standard loan origination fees. Interest rates are set by the lender and are not reviewed or capped by TSBCI, as long as they stay within the maximum allowed under Texas law or the NCUA interest rate ceiling, whichever is lower.
The program runs first-come, first-served.
Who can apply
Eligible borrowers are for-profit businesses with fewer than 500 employees, domiciled in Texas, with at least 51% of their employees located in Texas. Non-profit borrowers cannot be enrolled, though non-profit and not-for-profit financial institutions can apply to become approved lenders.
Loan proceeds must go toward a business purpose: start-up costs, working capital, franchise fees, or acquiring equipment, inventory, or services used to produce, manufacture, or deliver the business's goods or services, or to purchase, construct, renovate, or make tenant improvements to a place of business that is not a passive real estate investment. Funds can buy any tangible or intangible asset except goodwill. Passive real estate investment, purchasing securities, and lobbying are all excluded uses.
Businesses that previously received Paycheck Protection Program funding or other federal COVID-19 aid, such as the Shuttered Venues Grant, Restaurant Revitalization Fund, or SBA Debt Relief, are not disqualified from TSBCI participation because of that.
A business can have more than one loan enrolled in the program, subject to certain restrictions the FAQ does not detail further.
How to apply
- Businesses do not apply to TSBCI directly. Contact your preferred bank, credit union, or CDFI and ask whether it participates in TSBCI.
- If your lender does not participate, contact other financial institutions; a list of approved participating financial institutions is published on the TSBCI site.
- Go through the lender's standard loan application process. Both the borrower and the lender will need to review and certify or acknowledge information on TSBCI-specific forms as part of that process.
- For a financial institution wanting to become a participating lender: register at gov.texas.gov/business/page/tsbci, get access to the program application portal upon registration approval, submit a completed participation application, then sign a participation agreement prescribed by the EDT before getting access to the loan enrollment portal.
Frequently asked
Can I apply directly to TSBCI for a loan?
No. TSBCI works only through participating financial institutions. Contact your preferred bank, credit union, or CDFI to ask about its participation in the program.
Is getting a TSBCI-enrolled loan harder than a normal business loan?
Not substantially. The process is similar to a standard loan; you and your lender will additionally review and certify some TSBCI-specific forms.
What interest rate will I pay?
TSBCI does not set or approve interest rates. Your lender sets the rate, capped only by the maximum allowed under Texas law or the NCUA interest rate ceiling, whichever is lower.
I already got PPP or other COVID-19 federal aid. Can I still qualify?
Yes. Having received PPP, the Shuttered Venues Grant, the Restaurant Revitalization Fund, or SBA Debt Relief does not disqualify you from TSBCI.
Does my business have to be a for-profit company?
Yes for borrowers; loans to non-profit organizations cannot be enrolled in TSBCI. Non-profit and not-for-profit lenders, however, can apply to become participating financial institutions.
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Reviewed 2026-09-25. Programmes change, so check eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private firm and is not part of any government body.