FINANCIAL ASSISTANCE AND FINANCING SOURCES

 

Quick Links

|  Leverage Fund  |  AR-TEX Council of Governments  |  East Texas Regional Development Company  |

|  Texas Loan Programs  |  Texas Department of Agriculture  |Small Business Administration  |

|  R&D Grants/Contracts for Technology-based Companies  |

| CDC Resource Guides Home  |  CDCOnline Home  |

 

Leverage Fund

In order to enhance their community's ability to provide financing for expanding and new businesses, the State of Texas allows cities to pass sales taxes devoted to economic development.  Once the citizens approve this sales tax, the city is allowed to participate in the Texas Leverage Fund program, which, in effect, offers each community an added source of financing for companies locating in their communities.  Funds may be used to finance eligible costs including the purchase of land, buildings, machinery and equipment for manufacturing and industrial operations. For more information on whether the Leverage Fund is available in a specific community contact:

 

Bowie County
•	New Boston Special Industrial Development Corp., (903) 628-6340
•	Maud City Industrial Development Foundation, (903) 585-2294
Cass County
•	Atlanta Economic Development Corporation, (800) 594-2135 or (903) 796-5627
•	Atlanta City Development Corporation, (903) 796-6041
•	Linden Economic Development Foundation, (903) 756-7774
•	Queen City Economic Corporation, (903) 796-9060, (Revolving Loan Fund)
Harrison County
•	Marshall Economic Development Corp. (903) 934-8035
•	Greater Marshall Chamber of Commerce, (903) 935-7868
Marion County
•	Marion County Chamber of Commerce, (903) 665-2672
Panola County
•	Carthage Economic Development Corporation, (903) 693-3868
•	Panola County Development Foundation, (903) 693-8578
Sabine County
•	Sabine County Chamber of Commerce, (409) 787-2732
San Augustine County
•	San Augustine Chamber of Commerce, (936) 275-3610
Shelby County
•	Shelby County Chamber of Commerce, (936) 598-3682
•	City of Joaquin, (936) 269-3021

 

( Back to Top )

 

AR-TEX Council of Governments

ATCOG offers several loan programs designed to help in economic development projects.  The purpose of the projects is to create and retain jobs in the region.

 

The Ark-Tex Regional Development Company, Inc.  – (ATRDC) is a Small Business Administration Certified Development Company which markets and packages SBA 504 loans under a management agreement with ATCOG.  Proceeds from 504 loans must be used for fixed asset projects such as: purchasing land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping; construction of new facilities, or modernizing, renovating or converting existing facilities; or purchasing long-term machinery and equipment.  The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing.

 

The Chapman Revolving Loan Fund – This fund is an economic development tool for businesses or governmental entities to provide loan funds. The original funds were from a grant from Housing & Urban Development. Former U. S. Representative Jim Chapman was the catalyst for obtaining the funds.

 

The Northeast Texas Economic Development District (NETEDD) – The East Texas Rural Access Program (ETRAP) is a revolving loan fund whose purpose is to increase access to primary health care in rural parts of East Texas. This is a new program with funding from the Robert Wood Johnson Foundation and the U.S. Department of Agriculture. The ETRAP RLF is managed by the Northeast Texas Economic Development District Inc. Contact: AR-TEX Council of Governments, (936) 832-8636,  www.atcog.org/economic_development.htm

 

( Back to Top )

 

East Texas Regional Development Company

ETRDC offers several loan programs designed to help in economic development projects. The purpose of the projects is to create and retain jobs in the region.     

 

SBA 504 Loan Program – The SBA 504 Program is designed to provide long-term, fixed rate financing, to eligible businesses. Loan proceeds can be used for fixed assets such as real estate and long life equipment (10 years of life or more), new construction, and even improvements to existing properties.

 

Chapman Loan Program – The Chapman Loan Program (CLP) is designed to provide long term financing to East Texas Businesses in a 14 county area. Loan proceeds can be used for a variety of purposes including invoice and work capital. Proceeds can even be used to help with equity injections.

 

Economic Development Loans – The CLP Economic Development Loan Program is designed to financing to cities, counties and nonprofit economic development organizations in a 14 county area. Loan proceeds can be used for infrastructure improvements to assist local businesses. Contact: (903) 984-3989, www.etrdc.com/383/Loan-Programs.htm

 

( Back to Top )

 

Texas Loan Programs 

http://governor.state.tx.us/ecodev/financial_resources/loan_assistance/

Product Development Fund – The Texas Product Development Fund provides financing to aid in the development, production and commercialization of new or improved products within the state. Products appropriate for the Fund are inventions, devices, techniques, or processes, that have advanced beyond the theoretical stage and are ready for immediate commercial application.  Preference for funding will be given to the state’s defined industry clusters within emerging technology fields including semiconductors; nanotechnology; bio technology and bio medicine; renewable energy; agriculture and aerospace. Job creation and job retention within Texas will be considered within funding priorities.  The Fund is a revolving loan program with capital provided from $25 million in taxable bonds issued in 2005. The Office of the Governor, Texas Economic Development Bank administers the Fund at the direction of the Governor’s appointed nine member board.

 

Small Business Fund -- The Texas Small Business Fund provides financing to foster and stimulate the development of small businesses in Texas. Preference for funding will be given to the state’s defined industry clusters within emerging technology fields including semiconductors; nano technology; biotechnology and bio medicine; renewable energy; agriculture and aerospace.  Preference will be given to small businesses that have received financing from the state’s Small Business Development Centers (SBDC) or through the Small Business Innovative Research program (SBIR).  The Fund is a revolving loan program with capital provided from $20 million in taxable bonds issued in 2005. The Office of the Governor, Texas Economic Development Bank administers the Fund at the direction of the Governor’s appointed nine member board.

 

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. TID loans can be used for a variety of purposes including community infrastructure development. TID financing is available for loans above $5,000,000.

 

Industrial Development Bonds -- 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 nonprofit 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.  For more information, contact Office of the Governor, Office of Economic Development & Tourism, (512) 936-0100, http://governor.state.tx.us/ecodev/

 

Texas Department of Agriculture

The Texas Capital Fund (TCF) program is administered by the Texas Department of Agriculture through an interagency agreement with the Office of Rural Community Affairs (ORCA). The TCF program encourages business development, retention, or expansion by providing funds to eligible applicants. Funds will be awarded for the express purpose of assisting in the creation of new permanent jobs or retention of existing permanent jobs, primarily for low and moderate income (LMI) persons. In order to comply with the national goal of expanding economic opportunities for LMI persons, a minimum of 51 percent or more of all the jobs created or retained by the business must benefit persons who qualify as LMI.  www.agr.state.tx.us/agr/program_render/0,1987,1848_6050_0_0,00.html?channelId=6050

 

( Back to Top )

 

Small Business Administration

SBA offers financial assistance in the form of partial loan guaranties on small business loans made by banks and other commercial lenders.  When a loan request does not meet regular lender approval requirements, SBA guaranteed financing can enable the lender to provide financing that would not otherwise be available on reasonable terms.

 

SBA Guaranteed 7(a) Loan – 7(a) loans are the most basic and most used type loan of SBA's business loan programs. Its name comes from section 7(a) of the Small Business Act, which authorizes the Agency to provide business loans to American small businesses.  All 7(a) loans are provided by lenders who are called participants because they participate with SBA in the 7(a) program. Not all lenders choose to participate, but most American banks do. There are also some nonbank lenders who participate with SBA in the 7(a) program which expands the availability of lenders making loans under SBA guidelines.  7(a) loans are only available on a guaranty basis. This means they are provided by lenders who choose to structure their own loans by SBA's requirements and who apply and receive a guaranty from SBA on a portion of this loan. The SBA does not fully guaranty 7(a) loans. The lender and SBA share the risk that a borrower will not be able to repay the loan in full. The guaranty is a guaranty against payment default. It does not cover imprudent decisions by the lender or misrepresentation by the borrower.  Contact: local bank­ or go to: http://www.sba.gov/financialassistance/prospectivelenders/7a/

 

SBA 504 Program – The CDC/504 loan program is a long-term financing tool for economic development within a community. The 504 Program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. A Certified Development Company is a nonprofit corporation set up to contribute to the economic development of its community. CDCs work with the SBA and private-sector lenders to provide financing to small businesses.  Typically, a 504 project includes a loan secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a loan secured with a junior lien from the CDC (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and a contribution of at least 10 percent equity from the small business being helped.  Contact: AR-TEX Council of Governments, (936) 832-8636, www.atcog.org/economic_development.htm or East Texas Regional Development Company, (903) 984-3989, www.etrdc.com/383/Loan-Programs.htm

 

SBA International Trade Loans – Several loan guarantee programs are available for companies involved in exporting.  For more information on the various SBA international trade loan programs, contact your local bank or go to:

www.sba.gov/oit/finance/banklist.html#tx                                           

 

( Back to Top ) 

 

R&D Grants/Contracts for Technology-based Companies

Small Business Innovation Research Grants (SBIR) – Competitive awards available only to start-up and existing small technology-based companies.  Eleven participating federal agencies (NASA, NIH, DOD, EPA, etc.) solicit for R&D proposals and award funding to qualified businesses. Companies submit proposals in response to specific solicitations.  Agencies make SBIR awards based on small business qualifications, degree of innovation, technical merit, and future market potential.