The Texas State Small Business Credit Initiative, commonly referred to as TSBCI or SSBCI-Texas, is a federally funded program administered by the Texas Economic Development Bank within the Office of the Governor. The program uses capital provided under the American Rescue Plan Act’s SSBCI reauthorization to expand access to capital for small businesses across Texas. This guide covers the program’s current status and what Texas business owners need to know in 2026.
Program Background
The State Small Business Credit Initiative was originally created in 2010 under the Small Business Jobs Act. It was reauthorized and expanded in 2021 under the American Rescue Plan Act with approximately $10 billion in new funding distributed to states, territories, and tribal governments. Texas received one of the largest state allocations, reflecting the size of its small business economy.
The program operates through approved financial institutions rather than providing funds directly to businesses. TSBCI capital is deployed through several mechanisms designed to increase lending and investment in small businesses that might not otherwise qualify for conventional financing.
How TSBCI Works
Capital Access Programs
Under the capital access program model, TSBCI provides a reserve fund that covers a portion of potential loan losses. Participating lenders can enroll loans that fall outside their normal underwriting criteria. Both the borrower and lender contribute a small premium to the reserve, and TSBCI matches those contributions. This structure encourages lenders to approve loans they would otherwise decline.
Loan Participation Programs
TSBCI may also participate directly in loans alongside private lenders, reducing the lender’s exposure and enabling larger loan amounts or more favorable terms for borrowers. The participation structure varies based on the specific program design approved by the U.S. Treasury.
Venture Capital and Equity Programs
A portion of SSBCI funds may be allocated to equity investments in small businesses, either directly or through fund-of-fund structures. These programs are designed to increase access to growth capital for businesses in underserved communities and for socially and economically disadvantaged individuals.
2026 Program Status
- Deployment phase: Texas is actively deploying SSBCI capital through approved financial institutions. Funds are being distributed on a rolling basis.
- Participating lenders: A growing list of banks, credit unions, CDFIs, and other lenders are participating in TSBCI programs. Contact the Texas Economic Development Bank or your lender to confirm participation.
- SEDI requirements: The reauthorization requires that a meaningful portion of funds serve socially and economically disadvantaged individuals (SEDI). This includes businesses in low-income communities, minority-owned businesses, and other underserved populations.
- Reporting and compliance: The Treasury Department monitors state programs for compliance with deployment timelines and SEDI requirements.
Eligibility
TSBCI programs are generally available to businesses that meet the following criteria:
- Located in Texas or operating in Texas
- Fewer than 500 employees at the time of the transaction
- Not engaged in passive real estate investment, lending, lobbying, or speculative activities
- Seeking financing for business purposes (working capital, equipment, real estate, expansion)
Specific eligibility criteria may vary by participating lender and the specific TSBCI program the lender is using. Businesses should contact participating lenders directly to discuss their situation.
How to Access TSBCI Capital
- Contact a participating lender: TSBCI capital flows through approved financial institutions, not directly from the state. Ask your bank or credit union whether they participate in TSBCI programs.
- Prepare standard loan documentation: You will need business financial statements, tax returns, a business plan or description, and details about the proposed use of funds.
- Discuss TSBCI-enhanced terms: If your lender participates, they may be able to offer better terms, lower collateral requirements, or approve a loan that would otherwise be declined.
- Consider CDFI lenders: Community Development Financial Institutions often participate in TSBCI programs and specialize in lending to underserved businesses. CDFI loan guide.
Related Programs
TSBCI complements other government lending and credit programs available to Texas businesses:
- SBA 7(a) loans — government-guaranteed loans through SBA-approved lenders
- SBA 504 loans — fixed-asset financing through Certified Development Companies
- Texas government loan programs — comprehensive guide to state and federal lending
Find Your Financing Match
TSBCI is one of many programs that can improve access to capital for Texas small businesses. Our screening report identifies which lending, credit, and grant programs may match your specific business situation. Start your free screening →