Product Development and Small Business Incubator Fund

The Product Development and Small Business Incubator Fund offers long-term, asset-backed loans to near-bankable businesses commercializing new or improved products and small businesses or entities which foster growth of small businesses. The program targets those businesses which may be unable to obtain full financing or financing on workable terms in traditional capital markets.

Who Can Apply?

Near-bankable businesses commercializing new or improved products in the state, small businesses, small business incubators and accelerators, and other entities which promote the development and expansion of small businesses it the areas of semiconductors, nanotechnology, biotechnology, or biomedicine. Products in the research and development phase are ineligible for funding. Applicants must have at least 3 years of operating history and at least 1 year of revenue history.

Type of Incentive

Long-term, asset-backed loans fully secured by tangible assets, not to exceed $5 million. Interest rates on all loans are variable and generally below-market, comprised of a low weekly variable rate plus a risk premium determined by the Governor’s Office. Loan terms are capped based on use of funds, but are ultimately determined by staff in consultation with individual applicants. Loans can be flexibly structured based on the unique needs of applicants.

Eligibility Details

  1. Small businesses applying under the Small Business Incubator Fund must be domiciled in the State of Texas or have at least 51% of their employees located in the state, employ fewer than 100 full-time employees, and, if for-profit, be independently owned and operated.
  2. Loans must be fully secured by unencumbered tangible assets at a maximum Loan-to-Orderly Liquidated Value ratio of 1:1.
  3. Loans must be used for capital purchases or working capital infusions.
  4. Applicants must meet certain financial ratios.
  5. Preference is given to those businesses with the greatest likelihood of commercial success, job creation and job retention in the state.
  6. Third parties may serve as guarantors.

Program Overview


This rolling application process is further detailed by the image below:

Category: TX State Programs

The Capital Access Program (CAP) is a partnership between the State of Texas and selected non-profit lenders to increase access to financing for small and medium-sized businesses and non-profits which face barriers to accessing capital or fall outside of guidelines of conventional lending. The Program...
Learn More
Economic Development & Diversification In-State Tuition for Employees is a program that allows employees—and those employees’ family members—of a qualified business considering a relocation or expansion of its operations in the State of Texas to pay in-state tuition rates at public institutions of higher education...
Learn More

The Governor’s University Research Initiative (GURI), enacted in 2015, is aimed at helping Texas public institutions of higher education recruit distinguished researchers from around the world to the State of Texas. The program seeks to bolster both the standing of Texas public colleges and universities and economic development efforts statewide.

Learn More
Industrial Revenue Bonds (IRBs) provide a source of tax-exempt or taxable bond finance for projects involving significant private activity that promote new and existing businesses, encourage employment, and expand the tax base of a community. IRBs are issued by Industrial Development Corporations sponsored by a...
Learn More
The Opportunity Zone Program was created through the Tax Cuts & Jobs Act of 2017, and is a federal initiative administered by the U.S. Department of Treasury. The program is designed to spur economic development and job creation in distressed communities throughout the United States...
Learn More

The Self Sufficiency Fund provides training grants for industry recognized certificates and credentials that lead to permanent full-time employment.

Learn More
For employers with more than 100 employees, customized training provided on site at the company's location is available at no cost through the Skills Development Fund program.  Texas' premier job-training program provides opportunities for Texas businesses and workers to improve skills, expand employment and increase...
Learn More
The Spaceport Trust Fund (STF) is a financial tool to support the development of infrastructure necessary or useful for establishing a spaceport in the State of Texas. Fund proceeds are available to any spaceport development corporation which has secured a viable business entity if that...
Learn More

The Texas Enterprise Zone Program (EZP) is a state sales and use tax refund program designed to encourage private investment and job creation in economically distressed areas of the state.

Learn More