Category: TX State Programs
The Texas Leverage Fund (TLF) is a loan program providing financing for qualified projects in Texas municipalities. The program allows communities to leverage future sales tax revenues to support economic development projects that promote business expansion, recruitment, and exporting. The program is geared toward small, rural communities which may be unable to access traditional sources of infrastructure financing like municipal bonds.
*This program is currently inactive.
Who Can Apply?
Economic Development Corporations (EDCs) created by a municipality pursuant to Chapter 504 or Chapter 505 of the Texas Local Government Code who are planning qualified projects eligible for TLF funding. The municipality must have adopted either the 4(A) or 4(B) economic development sales tax to be eligible for the program.
Type of Incentive
Loans underwritten by the Governor’s Office of Economic Development & Tourism are secured by 4(A) and/or 4(B) economic development sales tax revenues and used to fund eligible costs of qualified projects. Loans range from $25,000 to $5 million and may be available for interim, long-term or gap financing. TLF loans provide flexible financing terms to match the unique needs of communities. The interest rate on all TLF loans is the Federal Funds rate (as established by the Federal Reserve) plus 3 percent.
For full eligibility details, please refer to the TLF Program Guidelines (insert link) and TLF Administrative Rules (insert link).
- Loan proceeds must be used to fund eligible costs of qualified projects, which may include land, buildings, machinery and equipment for manufacturing and industrial operations as well as sports, athletic, entertainment and public park facilities.
- All loans require a first lien pledge on 4(A) and/or 4(B) sales tax receipts. Borrowers must maintain specified debt service coverage ratios throughout the term of their loan.
Please note that the Texas Leverage Fund program is not currently accepting applications for any new loans. EDCs should contact the Governor’s Office of Economic Development & Tourism to learn more about the program.