Construction Business Grants in Texas: Programs for Contractors

Texas is one of the largest construction markets in the country, driven by population growth, infrastructure investment, and a strong commercial development pipeline. Construction businesses in Texas — from general contractors and specialty trades to civil construction firms — have access to a meaningful set of government programs that can help with bonding, workforce training, procurement, and energy efficiency.

This guide covers the most relevant construction business grant and incentive programs available in Texas, including federal, state, and local programs that contractors should know about.

Bonding Assistance Programs

Surety bonding is one of the biggest barriers to entry for small construction businesses. Government bonding assistance programs help contractors obtain the bonds required to bid on public works projects.

SBA Surety Bond Guarantee Program

The SBA Surety Bond Guarantee Program provides guarantees to surety companies, encouraging them to issue bonds to small construction businesses that might not otherwise qualify. The program covers bid bonds, payment bonds, and performance bonds on contracts up to $6.5 million (up to $10 million for federal contracts).

The program works through two channels:

• Prior Approval Program: Surety companies submit bond applications to the SBA for approval before issuing the bond.
• Preferred Surety Bond Program: Pre-approved surety companies can issue SBA-guaranteed bonds without prior SBA approval, speeding up the process.

For Texas construction businesses that are new, small, or lack sufficient bonding history, the SBA Surety Bond program can be the difference between being able to bid on public projects and being locked out.

City and County Bonding Programs

Several Texas cities offer their own bonding assistance programs. The City of Houston, for example, operates a bonding assistance program through its Office of Business Opportunity that helps small construction businesses build their bonding capacity over time. Check with your city's economic development or small business office for local bonding programs.

Procurement and Certification Programs

Texas HUB Certification

The Historically Underutilized Business (HUB) program is one of the most valuable certifications for Texas construction businesses. The State of Texas has a goal of awarding 11.2% of total contract value to HUB-certified businesses, and construction is one of the largest categories of state spending.

HUB certification qualifies your business for:

• State construction contract set-asides and subcontracting goals
• Inclusion in the state's HUB directory, which prime contractors and state agencies use to identify subcontractors
• Networking events and mentor-protege programs

Certification is free through the Texas Comptroller of Public Accounts. Eligible businesses include those owned by women, minorities, service- disabled veterans, and businesses located in economically disadvantaged areas.

DBE Certification

The Disadvantaged Business Enterprise (DBE) program applies to federally funded transportation projects. If your construction business works on highway, bridge, airport, or transit projects that receive federal funding, DBE certification opens significant contract opportunities. TxDOT (Texas Department of Transportation) sets DBE participation goals on federally funded projects.

DBE certification is administered through TxDOT and other certifying agencies in Texas. The certification criteria focus on business size, ownership, and economic disadvantage.

Federal SDVOSB and 8(a) Programs

Construction businesses owned by service-disabled veterans can access federal sole-source and set-aside contracts through the SDVOSB program. The SBA 8(a) Business Development Program provides similar benefits for socially and economically disadvantaged business owners. Federal construction contracts awarded through these programs can be significant. See our guide to veteran business grants in Texas.

Workforce Training Programs

Skills Development Fund

The Texas Workforce Commission's Skills Development Fund is highly relevant for construction businesses. The fund provides grants for customized training programs developed in partnership with local community colleges. Construction companies can use these funds to train workers in areas like:

• Safety certifications (OSHA 10, OSHA 30)
• Heavy equipment operation
• Welding and fabrication
• Electrical and plumbing trades
• Project management
• Blueprint reading and estimating

Given the persistent skilled labor shortage in Texas construction, the Skills Development Fund can help contractors build a trained workforce at reduced cost.

Apprenticeship Programs

Texas supports registered apprenticeship programs in the construction trades through the Department of Labor. Employers who hire registered apprentices can access federal and state tax credits, and apprentices receive structured on-the-job training combined with classroom instruction. Major construction trade unions and industry associations operate apprenticeship programs across Texas.

Work Opportunity Tax Credit

Construction companies that hire workers from qualifying target groups (veterans, SNAP recipients, ex-felons, long-term unemployed) can claim federal tax credits of $2,400 to $9,600 per qualifying employee. Given the diverse labor pools that construction companies typically hire from, WOTC can provide meaningful savings across your workforce.

Energy Efficiency and Weatherization Programs

Weatherization Assistance Program (WAP)

The federal Weatherization Assistance Program provides funding to states for weatherization of low-income homes. In Texas, this program creates contract opportunities for construction businesses that perform weatherization work — insulation, air sealing, HVAC improvements, and window replacement. The Texas Department of Housing and Community Affairs administers the program and contracts with local organizations that hire weatherization contractors.

Energy Efficiency Tax Credits and Incentives

Construction businesses can benefit from energy-related programs in two ways:

• For your own operations: Federal energy tax credits for installing solar, upgrading fleet vehicles, or improving your facilities.
• For client projects: The 179D Energy Efficient Commercial Buildings Deduction can be allocated to the designer (architect or contractor) of energy-efficient commercial buildings, including government-owned buildings. This is an often-overlooked benefit for construction companies that build energy-efficient commercial or government buildings.

USDA REAP

Construction businesses in rural areas may qualify for the Rural Energy for America Program, which provides grants (up to 25% of project cost) and loan guarantees for energy efficiency improvements and renewable energy systems. This can cover efficiency upgrades to your shop, equipment, and facilities.

SBA Lending Programs for Contractors

SBA 7(a) Loans

SBA 7(a) loans are widely used by construction businesses for equipment purchases, working capital, and business expansion. The lower down payments and longer terms compared to conventional commercial loans make 7(a) loans attractive for contractors managing cash flow through project cycles.

SBA 504 Loans

If you are purchasing real estate for your construction business (shop, yard, office) or making major equipment investments, the SBA 504 program provides long-term, fixed-rate financing with as little as 10% down. See our comparison of SBA loans vs. grants.

Local Programs for Construction Businesses

• City contract preferences: Many Texas cities have local business preferences, small business set-asides, and M/WBE programs that favor local construction businesses for city projects.
• Enterprise Zone incentives: Construction businesses creating jobs in designated Enterprise Zones can receive sales tax refunds on equipment and materials.
• Property tax abatements: If you are building or expanding your construction yard or facility, local property tax abatements may be available.

Steps for Construction Business Owners

1. Get certified: HUB, DBE, and SDVOSB certifications open procurement opportunities. All are free.
2. Explore bonding assistance: If bonding capacity limits your bidding ability, contact the SBA Surety Bond program and your city's business office.
3. Partner on workforce training: Contact your local community college about Skills Development Fund partnerships for trade training.
4. Register on SAM.gov: Required for all federal contracting. Also register in your state and city vendor systems.
5. Screen for all programs: Construction businesses often qualify for general business programs in addition to construction-specific ones.

Find Programs That May Fit Your Business

Texas construction businesses are often eligible for more programs than they realize. Between bonding assistance, procurement certifications, workforce training funds, energy programs, and general business incentives, the landscape is broad.

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 →