Insights · Policy brief · Small business capital
The State Small Business Credit Initiative (SSBCI) in Texas
Texas was allocated $472 million in federal SSBCI funds to help small businesses reach capital. As of March 31, 2025, it had deployed 2.8% of the funds it had received, the lowest share of any state or jurisdiction.
What SSBCI is
The State Small Business Credit Initiative is a $10 billion federal program that gives states money to help small businesses and entrepreneurs get capital and technical assistance. It was created by the Small Business Jobs Act in 2010 and reauthorized and funded by the American Rescue Plan Act in 2021.
How Texas uses it
In 2023, Texas received $472 million to run two programs, together called the Texas Small Business Credit Initiative (TSBCI), administered by the Economic Development and Tourism Office within the Office of the Governor:
- Capital Access Program ($118 million). Builds a loan loss reserve so lenders can recover up to 100% of a loan’s principal after a charge-off. Loans from $5,000 to $5 million.
- Loan Guarantee Program ($354 million). Guarantees up to 80% of the unpaid principal. Loans from $5,000 to $20 million.
The gap
According to the U.S. Treasury’s SSBCI quarterly report through March 31, 2025, Texas had been disbursed $134,488,297 and had deployed $3,792,852, or 2.8%. That leaves roughly $360 million idle, and the brief warns that more than $350 million in federal funds could be forfeited if the state does not act.
What the brief recommends
- From community lenders (CDFIs): invest in the TSBCI office’s technology, let CDFIs sell or participate loans, allow standard loan servicing actions, speed up the compliance audit, and share success stories.
- From traditional banks: add an equity investment program delivered through qualified private equity funds, as Florida did, with SSBCI capital leveraged at least 2 to 3 times with private capital.
- For the state: draw down and fully deploy the remaining funds, and publish what has been disbursed to and deployed by each participating lender.
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