If you own a business structured as a partnership in Texas, you may wonder how your entity type affects eligibility for grants, loans, and incentive programs. The short answer is that partnerships are generally eligible for the same programs as other entity types. However, the details of your partnership, including ownership percentages, individual partner demographics, and how the partnership is structured, can influence which specific programs provide the best fit.
How Partnership Structure Affects Eligibility
Ownership Percentage Thresholds
Many programs that target specific demographics, such as minority-owned, women-owned, or veteran-owned businesses, require that qualifying individuals own at least 51% of the business. In a partnership, this means the qualifying partner or partners must hold a majority ownership stake. For example, HUB certification requires at least 51% ownership by qualifying individuals. Learn about HUB certification.
Control Requirements
Beyond ownership percentage, many certification programs require that qualifying individuals control daily management and long-term decision-making. Partnership agreements should clearly document management authority if you plan to pursue demographic-based certifications.
Personal Guarantee Requirements
SBA loans and many other lending programs require personal guarantees from partners owning 20% or more of the business. Each guaranteeing partner's personal credit history affects loan approval and terms.
Federal Programs for Partnerships
SBA Lending
Partnerships are eligible for all SBA loan programs including 7(a), 504, and Microloans. The SBA evaluates the business and the personal financials of all partners owning 20% or more. Complete guide to SBA loans.
SBIR/STTR Grants
Partnerships conducting qualifying research and development may apply for SBIR and STTR grants. The business must be organized for profit and majority-owned by U.S. citizens or permanent residents.
Government Contracting
Partnerships may pursue 8(a), HUBZone, WOSB, and SDVOSB certifications provided the ownership and control requirements are met by qualifying partners. Guide to government contracting.
State Programs
Texas HUB Certification
Partnerships may qualify for HUB certification if at least 51% of ownership is held by qualifying individuals (women, minorities, or service-disabled veterans) who also control daily operations.
Skills Development Fund
Training grants are available to partnerships creating jobs, with no restrictions based on entity type.
Texas Franchise Tax
Partnerships file Texas franchise tax returns and may access the same credits and exemptions available to other entity types. The no-tax-due threshold and EZ computation method may benefit smaller partnerships.
Tax Credits
Pass-Through Credits
Tax credits earned by partnerships, including WOTC, R&D credits, and energy credits, pass through to individual partners on their personal tax returns based on their ownership percentage. This pass-through structure can be advantageous for partners in higher tax brackets.
Find Programs That May Fit Your Partnership
Partnership eligibility depends on your specific ownership structure, partner demographics, and business profile. Our free screening report evaluates your partnership against 150+ verified programs and identifies which ones may match. Start your free screening →