Texas Product/Business Fund
Capital loans for product commercialization and businesses
The Texas Product/Business Fund provides asset back financing to companies currently doing business in the state. Financing is done in the form of direct asset based loans with a variable interest rate tied to London Interbank Offered Rate (LIBOR). Loans can be amortized up to the life of the asset.
Texas companies or out-of-state/international companies doing business in the state are eligible to apply. Applicants can submit a free brief pre-assessment in order to check eligibility.
Attributes of the Texas Product Fund:
• Asset Based Loans
• Competitive Loan-To-Value (LTV)
• Positive EBITDA not required
• Secure Loans with Property Plant & Equipment (PP&E)
Click the links below to download a detailed overview and a pre-assessment submittal form for the Texas Product/Business Fund.
TP/BF Fund Overview
TP/BF Pre-Assessment Submittal Form
Texas Bank for Economic Development Brochure
TPBF Frequently Asked Questions (FAQs)
Contacts Sheet
Request More Information
The Office of the Governor, Texas Economic Development Bank administers the Texas Product Fund at the direction of the Governor’s appointed nine member board. Preference for funding is given to the states’ defined industry clusters including, but not limited to: nanotechnology, biotechnology, biomedicine, renewable-energy, agriculture, and aerospace. Job creation and retention within Texas will be considered within funding priorities.
Leverage Fund
Introduced in 1992, the Texas Leverage Fund (TLF) provides an additional source of financing to communities that have adopted an economic development sales tax. Communities may leverage future sales tax revenues to support job retention or creation.
Terms
Available for interim, long-term or gap financing, TLF loans provide flexible financing terms to match the unique needs of communities, with maturities of up to 15 years available. Generally, EDCs are eligible to borrow four to five times annual sales tax revenues, up to $5 million. TLF loans are low-cost, providing capital to communities at floating Prime Rate, as published in the Wall Street Journal.
Future sales tax revenues serve as collateral for loan repayment with required debt service coverage ratios specified in the Texas Leverage Fund Program Guidelines. Pledged tax collections not needed for actual debt service are available for other projects.
Industrial Revenue Bond Program
The State of Texas Industrial Revenue Bond Program (IRB) is designed to provide tax-exempt or taxable financing for eligible industrial or manufacturing projects as defined in the Development Corporation Act of 1979 (Act). The Act allows cities, counties, conservation and reclamation districts to form non-profit industrial development corporations (IDCs) or authorities on their behalf. The purpose is to provide bonds for projects within their jurisdictions.
The IDC acts as a conduit through which monies are channeled. Generally, bond debt service is paid by the business under the terms of a lease, sale or loan agreement. As such, it does not constitute a debt or obligation of the governmental unit, the IDC or the State of Texas.
Process
The IDC issuing the bonds must pass a declaration of official intent resolution (tax-exempt only); a bond resolution approving the project; set the bond amount; and make findings required by state law. In addition, the governmental unit of the IDC must pass a resolution that approves the corporate resolution and the project. All terms of the bond sale are negotiated among the appropriate parties and documents are prepared by legal counsel.
The IDC submits an application to the Economic Development and Tourism Division of the Governor's Office (OOGEDT) and the Office of the Attorney General simultaneously. However, the Attorney General will not give final approval until they receive an approval letter from the OOGEDT. Once all approvals have been granted, the IDC can issue the bonds and finance the project from the proceeds.
Industry Development Loan Program
The Texas Industry Development (TID) Loan Program provides capital to Texas communities at favorable market rates. The main objective of TID is to support projects that will stimulate the creation of jobs and corporate expansion and relocation. TID loans can be used for a variety of purposes, including the purchase of land, buildings, construction, machinery and equipment. TID financing is available for loans above $5,000,000.
TID loans are generally requested by a community's economic development corporation, or EDC.
Terms
TID Program loans are low-cost, long-term financing opportunities to cover costs of economic development projects. The term of the loan cannot extend beyond the useful life of the assets, or bond maturity in 2025.
Source of Funds
The TID program operates within a non-profit entity incorporated under the Development Corporation Act of 1979 (Vernon's Texas Civil Statutes Article 5190.6), Texas Small Business Industrial Development Corporation (TSBIDC). The 67th Legislature in 1981 authorized TSBIDC to issue bonds for economic development projects. The Office of the Governor Division of Economic Development and Tourism administers the TID program. TID loan obligations do not constitute any liability on the part of the State.
Starting in 1983, TSBIDC issued special limited revenue obligations supporting job creation and capital investment for businesses and communities in Texas. Supported by a bond issuance on July 15, 1986, TID funds are directed to communities for economic development. Debt service is provided by project revenues.
For more information and applications for these programs please visit the Economic Development Bank website
