State of Texas Financing Opportunities

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.
Use of Proceeds

Loan proceeds must be used to pay eligible "costs" of "projects" as defined by the Development Corporation Act of 1979 (the Act), as amended. Under Section 4A of the Act, examples of eligible costs include land, buildings, machinery and equipment for manufacturing and industrial operations. Under Section 4B of the Act, examples of eligible costs include sports, athletic, entertainment and public park purposes and events.
Resources

    * Texas Comptroller Tax Publications (96-302) – Economic Development Sales Tax Development Corporation Act
    * Texas Leverage Fund Loan Application [738KB MSWord]
    * Texas Leverage Fund Program Guidelines (PDF)

Contact Information

For additional information on the Texas Leverage Fund Program, contact (512) 936-0100. 

Also:

Industry Development Loan Program
Program Objective

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.

TID Loan Program Application [683KB MSWord]
Contact Information

For additional information on the Texas Industry Development Loan Program, contact  (512) 936-0100.
 
 
 

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