5 Funding Sources for Texas Small Businesses
- stephenvillesbdc
- Apr 16
- 3 min read
Starting or growing a small business takes vision, grit—and capital. For Texas entrepreneurs, a wide range of funding opportunities are available at the state level, designed to support innovation, job creation, and economic development. Whether you're launching a startup or scaling an established company, exploring state-specific options can give your business a competitive edge.
As Texas Small Business Development Center (SBDC) consultants, we’ve worked with countless entrepreneurs navigating the funding landscape. Below are five funding sources you may not be aware of that are tailored specifically for small businesses in the Lone Star State:
1. Texas Product Development and Small Business Incubator Fund (PDSBI)
This state-funded loan program supports the development and commercialization of new or improved products. It's designed for companies engaged in tech, research, and manufacturing—and it's especially helpful for startups with scalable business models.
What it offers:
Long-term, asset-backed loans
Below-market interest rates
Support for facilities, equipment, and working capital
Who it's for: Startups and small businesses in R&D, product development, or high-growth sectors.
More Information: Texas Economic Development Bank
2. Texas Workforce Commission Skills for Small Business Program
While not a traditional loan or grant, this program provides valuable funding to help small businesses train their employees—an often-overlooked form of financial support.
What it offers:
Up to $1,800 per new employee for training through local community colleges
$900 for existing employees
Full funding of tuition and fees for approved courses
Who it's for:Businesses with fewer than 100 employees looking to upgrade their workforce skills.
More Information: Texas Workforce Commission
3. Texas Enterprise Fund (TEF)
If your business plans to create new jobs or make significant capital investments in Texas, the Texas Enterprise Fund may be worth exploring. This is one of the most competitive funding sources in the state, often used to attract major expansions.
What it offers:
Performance-based financial incentives
Funds for projects that create jobs and promote significant economic impact
Who it's for: Businesses planning large expansions or relocations that create at least 75 full-time jobs (or 25 in rural areas).
More Information: Texas Enterprise Fund
4. Local Economic Development Corporations (EDCs)
Texas is home to hundreds of local Economic Development Corporations, many of which offer grants, low-interest loans, or matching funds to help local businesses thrive. These are often underutilized yet highly effective sources of support.
What they offer:
Grants or forgivable loans
Infrastructure or site development assistance
Business incentives for job creation
Who they're for: Businesses operating or planning to locate within specific Texas cities or counties.
Tip: Contact your local EDC or chamber of commerce to learn about opportunities in your area.
More Information: Texas Comptroller - EDCs
5. LiftFund and PeopleFund (Texas-Based CDFIs)
Community Development Financial Institutions (CDFIs) like LiftFund and PeopleFund provide accessible funding to entrepreneurs who may not qualify for traditional loans—particularly women, veterans, and minority-owned businesses.
What they offer:
Microloans from $500 to $500,000
Business advising and mentorship
Flexible underwriting for startups and underserved borrowers
Who they're for: Early-stage or underserved entrepreneurs across Texas.
More Information:
Accessing funding is one of the biggest hurdles small businesses face—but you don’t have to face it alone. If you’re not sure where to start or how to apply, connect with us. Our team can help you evaluate your funding options, prepare your financials, and strengthen your business plan to make you more fundable.
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