Equipment is one of the largest expenses for many Texas businesses. Whether you need trucks, manufacturing machinery, commercial kitchen equipment, medical devices, or construction tools, the cost of acquiring business equipment can be significant. While grants that simply hand you cash to buy equipment are rare, there are government programs that can offset equipment costs through grants, tax incentives, and favorable financing.
This guide covers the real programs that may help Texas businesses with equipment purchases.
Direct Grant Programs for Equipment
TCEQ Emissions Reduction Grants
The most direct grant funding for equipment in Texas comes through TCEQ's Texas Emissions Reduction Plan (TERP). If your business operates older diesel-powered equipment — trucks, generators, construction equipment, agricultural machinery — you may be eligible for grants covering a significant portion of the cost of replacing that equipment with cleaner alternatives. TERP grants can cover up to 80% of the incremental cost of upgrading.
USDA REAP Grants
Rural Texas businesses may be eligible for USDA Rural Energy for America Program grants for energy efficiency equipment and renewable energy systems. REAP grants can fund solar panels, energy-efficient HVAC systems, insulation, lighting upgrades, and other qualifying equipment. Grants can cover up to 40% of project costs. See our rural business grants guide.
Tax Incentives for Equipment
Section 179 Deduction
The Section 179 deduction is one of the most powerful tax incentives for equipment purchases. It allows businesses to deduct the full purchase price of qualifying equipment in the year of purchase rather than depreciating it over multiple years. For 2026, the deduction limit is over $1 million. Qualifying equipment includes:
- Vehicles (with certain limitations for passenger vehicles)
- Manufacturing machinery and production equipment
- Computers, software, and IT equipment
- Office furniture and fixtures
- Construction and trade equipment
- Restaurant and commercial kitchen equipment
- Medical and dental equipment
Bonus Depreciation
In addition to Section 179, businesses can claim bonus depreciation on qualifying new and used equipment. This allows businesses to deduct a significant percentage of the cost of qualifying assets in the first year. Section 179 and bonus depreciation can be combined for maximum tax benefit.
Enterprise Zone Sales Tax Refunds
Businesses in Texas Enterprise Zones can receive state sales and use tax refunds on equipment and building materials. Refunds are tied to job creation within the zone — up to $2,500 per new job created. For businesses making large equipment purchases in Enterprise Zones, this can provide meaningful savings.
SBA Equipment Financing
SBA 7(a) Loans
SBA 7(a) loans up to $5 million can fund equipment purchases with lower interest rates and longer repayment terms than conventional equipment financing. The SBA guarantee makes lenders more willing to finance equipment for smaller businesses.
SBA 504 Loans
The SBA 504 program provides long-term, fixed-rate financing for major equipment purchases (typically $125,000 and above) with as little as 10% down. This program is structured through Certified Development Companies and is well suited for expensive machinery, commercial vehicles, and large equipment systems. See our small business loans guide.
SBA Microloans
For smaller equipment needs, SBA Microloans provide up to $50,000 through community-based lenders. Microloans are useful for businesses needing hand tools, small machinery, point-of-sale systems, and specialty equipment.
Energy-Efficient Equipment Programs
- Utility rebates: Texas electric utilities offer rebates for energy-efficient commercial equipment including HVAC systems, lighting, refrigeration, and motors. Check your utility's commercial rebate program.
- Federal energy tax credits: The Investment Tax Credit covers solar energy equipment, and additional credits are available for other qualifying clean energy and energy efficiency equipment.
- Alternative fuel vehicle credits: Businesses purchasing electric, CNG, or other alternative fuel vehicles may qualify for federal tax credits.
Industry-Specific Equipment Programs
- Agriculture: USDA programs including FSA loans and EQIP grants can fund farm equipment and conservation equipment.
- Manufacturing: Texas Enterprise Fund and local property tax abatements can offset costs of major manufacturing equipment. See our manufacturing grants guide.
- Trucking: TCEQ TERP grants can cover a large portion of the cost of replacing older trucks.
- Healthcare: HRSA programs and FQHC funding can help cover medical and dental equipment costs.
How to Approach Equipment Funding
- Check grant eligibility first: TCEQ TERP and USDA REAP are the most direct grant programs for equipment.
- Plan for Section 179: Time equipment purchases to maximize first-year deductions.
- Check Enterprise Zone status: Sales tax refunds on equipment can be significant.
- Compare SBA lending to dealer financing: SBA loans often offer better terms than equipment dealer financing.
- Look at utility rebates: Even small rebates add up on major equipment purchases.
Find Programs That May Fit Your Equipment Needs
Texas businesses purchasing equipment may be eligible for more programs than they realize — especially emissions grants, tax deductions, energy rebates, and SBA lending.
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 →