Expanding a business in Texas — whether adding a second location, hiring more staff, purchasing equipment, or entering a new market — requires capital and planning. Texas offers some of the strongest business expansion incentives in the country at the state and local level. This guide covers the real programs that expanding Texas businesses may be eligible for.
State-Level Expansion Incentives
Texas Enterprise Fund (TEF)
The Texas Enterprise Fund is the state's premier deal-closing fund for business expansions that create significant jobs and capital investment. TEF provides direct grants to businesses that are considering Texas for expansion against competing out-of-state locations. While TEF typically targets larger projects, it demonstrates Texas's commitment to business growth.
Skills Development Fund
Expanding businesses that need to train new employees can access the TWC Skills Development Fund, which provides grants to community colleges partnering with employers for customized training. This is particularly valuable when expansion involves hiring workers who need specific skills training. See our workforce training grants guide.
Enterprise Zone Program
Businesses expanding into or within designated Texas Enterprise Zones can qualify for state sales and use tax refunds on equipment and building materials. Refunds can be up to $2,500 per new job created within the zone, providing meaningful savings on expansion costs.
Local Expansion Incentives
Property Tax Abatements
Cities and counties across Texas offer property tax abatements to businesses making significant capital investments. Abatements typically cover a portion of the increase in property taxes resulting from facility construction or improvement for a period of 5 to 10 years. These are negotiated directly with your local taxing entities and can significantly reduce expansion costs.
Tax Increment Reinvestment Zones (TIRZ)
Many Texas cities have established TIRZ districts where incremental tax revenue is reinvested in the zone. Businesses expanding within a TIRZ may benefit from improved infrastructure, development incentives, and in some cases direct grant funding for qualifying projects.
Economic Development Agreements
Texas cities and counties can negotiate economic development agreements with expanding businesses under Chapter 380 (cities) and Chapter 381 (counties) of the Texas Local Government Code. These agreements can include grants, tax rebates, fee waivers, and infrastructure improvements tied to job creation and capital investment commitments.
SBA Lending for Expansion
SBA 504 Loans
The SBA 504 program is specifically designed for major fixed-asset purchases — building acquisition, new construction, major equipment, and facility renovation. With as little as 10% down and long-term fixed rates, SBA 504 is one of the strongest financing tools for business expansion. See our small business loans guide.
SBA 7(a) Loans
SBA 7(a) loans up to $5 million can fund working capital, equipment, leasehold improvements, and other expansion costs. The SBA guarantee makes these loans more accessible than conventional commercial financing.
Federal Programs for Expansion
Work Opportunity Tax Credit (WOTC)
Businesses adding employees during expansion can claim WOTC credits of $2,400 to $9,600 per qualifying hire from target groups. For businesses hiring 10 or more new employees, WOTC credits can total tens of thousands of dollars.
New Markets Tax Credits
Businesses expanding into low-income census tracts may be eligible for New Markets Tax Credit financing. The program provides tax credits to investors who fund qualifying business activities in underserved areas, effectively reducing the cost of capital for businesses in those locations.
Opportunity Zones
Texas has numerous designated Opportunity Zones where investors can receive capital gains tax benefits for investing in qualifying businesses and real estate. If your expansion is in an Opportunity Zone, you may be able to attract investors who benefit from these tax advantages.
Rural Expansion Programs
Businesses expanding into rural Texas areas have additional options:
- Texas Capital Fund: Provides infrastructure grants to rural communities supporting business expansion.
- USDA B&I Loan Guarantees: Government-guaranteed loans for businesses expanding in rural areas.
- USDA RBDG: Rural Business Development Grants for business development activities in rural communities. See our rural business grants guide.
How to Approach Business Expansion Funding
- Contact your local economic development office: City and county incentives are often the most valuable and are negotiated directly. Many expanding businesses miss this step.
- Check Enterprise Zone status: If your expansion location is in an Enterprise Zone, you can access sales tax refunds on equipment and materials.
- Use SBA 504 for real estate and equipment: SBA 504 provides the best terms for major capital investments.
- Plan WOTC before hiring: WOTC certification must be requested before or on the day of hire — plan before you start your expansion hiring.
- Layer programs: Texas businesses can often combine property tax abatements, Enterprise Zone incentives, SBA lending, and workforce training grants in a single expansion project.
Find Programs That May Fit Your Expansion
Expanding businesses in Texas may be eligible for more programs than they realize — especially local incentives, workforce training grants, and federal tax credits that can be layered together.
Not sure which programs may fit your business? Our free screening report checks your business against 150+ verified programs — grants, tax credits, loans, and incentives — and shows you which ones may match. Start your free screening →