Texas Product Development and Small Business Incubator Fund (PDSBI)
Texas Economic Development Bank — Office of the Governor (Economic Development & Tourism)
Up to $5,000,000
Researched for this program: 5 rejection traps · 6 required documentsWhat decides this award ↓
TX asset-backed product & incubator loans
PDSBI is a state revolving loan program that provides long-term, asset-backed financing to Texas product-development companies and to small business incubators/accelerators. The Product Development Fund finances the development, production, and commercialization of new or improved products; the Small Business Incubator Fund finances the creation and operation of incubators that foster small businesses. Loans are made to applicants that cannot obtain full financing on workable terms in traditional capital markets, and all applicants must have at least three years of operating history. The fund is administered by the Texas Economic Development Bank within the Governor's Economic Development Finance division at the direction of the PDSBI Board.
- Funding type
- Loan
- Level
- State
- Amount range
- Up to $5,000,000
- Realistic amount
- Awards vary widely with the borrower's collateral and project. Because loans are asset-backed and underwritten individually, most are well under the $5M ceiling — typically in the low- to mid-six figures up to a few million for capital-intensive product or real-estate-backed projects.
- Deadline
- Rolling — applications accepted on a continuous basis and reviewed as submitted, subject to available fund capital and PDSBI Board approval.
- Status
- active
- States
- Texas
- Payment model
- loan
Who qualifies
- Applicant must have at least 3 years of operating history
- Must be unable to obtain full financing or financing on workable terms in traditional capital markets
- Product Development Fund: financing the development, production, or commercialization of a new or improved product
- Small Business Incubator Fund: small businesses must be domiciled in Texas or have at least 51% of employees located in Texas, employ fewer than 100 full-time employees, and (if for-profit) be independently owned and operated
- Loan must be adequately secured (asset-backed / collateralized)
- Project must demonstrate ability to repay
What it covers
Eligible expenses
- Product development, production, and commercialization costs
- Working capital tied to the funded project
- Equipment and machinery
- Real estate and facilities (longer term available)
- Incubator/accelerator development and operating costs (Small Business Incubator Fund)
Ineligible expenses
- Refinancing where no viable repayment path exists
- Speculative ventures without adequate collateral
- Lobbying or political activity
- Uses outside the approved project scope
How to apply
-
1
Pre-application consultation with the Texas Economic Development Bank
Contact the Economic Development Finance division (512-936-0100 / TexasProduct.Fund@gov.texas.gov) to confirm eligibility, the asset-backing/collateral picture, and which fund (Product Development vs Small Business Incubator) applies.
~6 hrs
-
2
Assemble financials and collateral package
Prepare 3 years of operating history/financial statements, the project plan, projections, and documentation of the collateral securing the loan. Because loans are asset-backed, the strength of the security drives underwriting.
~30 hrs
-
3
Submit formal loan application and undergo underwriting
Submit the completed application to the Bank. Staff underwrite the credit, value the collateral, and evaluate repayment ability and economic impact.
~12 hrs
-
4
PDSBI Board review and approval
The PDSBI Board reviews recommended loans and votes to approve. Approved loans proceed to closing and loan-document execution.
~8 hrs
PDSBI exists precisely for borrowers banks turned down — so lead with your collateral story, not your growth story. The fund is asset-backed, so a clean, well-valued security package (real estate, equipment, receivables) moves the underwriting far more than projections do. Call the Bank early; staff will tell you whether your collateral supports a fundable structure before you invest in a full application.
Deadline & timing
No fixed annual cycle. Applicants contact the Texas Economic Development Bank to begin underwriting; loans are presented to the PDSBI Board for approval. Funding availability depends on the revolving fund balance.
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