Texas Capital Access Fund

OVERVIEW:
The Texas Capital Access Fund was established to increase the availability of financing for businesses and nonprofit organizations that face barriers in accessing capital. Through the use of the Capital Access Fund, businesses that might otherwise fall outside the guidelines of conventional lending may still have the opportunity to receive financing. The essential element of the program is a reserve account established at the lending institution to act as a credit enhancement, inducing the financial institution to make a loan.
PARTICIPANTS
The Capital Access Fund may be accessed by participating financial institutions that are providing loans to borrowers who are eligible under the program.
USE OF PROCEEDS
Use of proceeds may include working capital or the purchase, construction, or lease of capital assets, including buildings and equipment used by the business. Refinancing of existing loans not originally enrolled under the program, construction or purchase of residential housing and simple real estate investments (excluding those occupied by the applicant’s business), are ineligible uses of capital access proceeds.
Lines of credit are permissible
ELIGIBILITY
A lender must submit a participation agreement to be considered for eligibility to enroll loans under the program.
To be eligible a borrower must be:
· a small business (100 or fewer employees);
· a medium business (100 to 500 employees); or
· a nonprofit organization;
· domiciled in this state or having at least 51% of its employees located in this state.
TERMS
Loan terms are determined by the lender. There is no minimum or maximum loan amount, only a maximum amount that the state will provide to the financial institution’s reserve fund.
RESERVE FUND CONTRIBUTIONS
Borrower
2%-3% of loan amount
Lender

Participating Lenders List Adobe.PDF
Must match borrower’s contribution. The financial institution may recover all or part of its contribution in any manner previously agreed upon.
State Contribution
An amount equal to the combined contribution of the borrower and lender, if the lender has:
1) assets of more than $1 billion; or
2) has previously enrolled loans under the program of more than $2 million
If a lender does not meet either 1) or 2) listed above, the state contribution will be 150% of the combined contribution of the borrower and lender.
If the borrower meets one of the following criteria the state contribution will be 200% of the combined contribution of the borrower and lender.
· Locating in or financing a project in an enterprise zone; or
· small or medium sized business, or a nonprofit organization, that operates or proposes to operate a day-care center.
STATE CONTRIBUTION LIMITS
The state contribution may not exceed 8% or $35,000 of the loan to businesses located in enterprise zones or for day-care providers. The limits are 6% or $35,000 for any other applicant.

The state’s maximum contribution to a reserve account for any single loan recipient may not exceed $150,000 during a 3 year period.
FEES

Normal and customary fees may be charged by the lender. No additional fees are charged by the state.
RESOURCES:
Annual Report 1999

CONTACT US:
For further information or assistance, please contact:
Texas Economic Development
P.O. Box 12728
Austin, TX 78711
E-mail: finance@TxED.state.tx.us
Phone: 512/936-0504 Fax: 512/936-0520