Texas Enterprise Fund (TEF) Grants for Business Expansion and Job Creation

Strategic Business Expansion Grants for Out-of-State Competition

Donor: Office of the Governor, Texas Economic Development & Tourism

About: The Texas Enterprise Fund (TEF) stands as the nation’s largest “deal-closing” grant program, strategically designed to give Texas a competitive edge when businesses are deciding between a Texas site and out-of-state alternatives. This performance-based financial incentive targets companies whose projects would generate significant capital investment and create substantial employment opportunities across the Lone Star State.

Since its establishment in 2003, the TEF has proven to be a game-changer for Texas economic development, disbursing over $600 million in grants and helping create more than 100,000 direct jobs while generating approximately $33.5 billion in capital investment. The fund operates on a unique performance-based model that ensures taxpayer protection through stringent requirements and clawback provisions when commitments aren’t met.

What sets the TEF apart from typical incentive programs is its careful analytical approach. Award amounts aren’t arbitrary but are calculated using a standardized model applied uniformly to each applicant. This model considers the number of jobs to be created, hiring timelines, and average wage levels, with adjustments based on proposed capital investment. Most importantly, the model ensures Texas will achieve a full return on investment within the project contract period through increased sales tax revenues.

For businesses seeking expansion opportunities, the TEF’s application process involves a rigorous 11-step due diligence screening. The evaluation examines project competitiveness, corporate activity, financial standing, tax status, legal issues, credit ratings, economic impact projections, and comparative analysis of competing locations. This thorough vetting culminates in a review by Texas’s top leadership—the Governor, Lieutenant Governor, and Speaker of the House must unanimously agree to support each TEF award.

Companies considering Texas for their next project should note that no funds are disbursed until after a grant contract is signed and job/wage targets are met for each reporting period (typically annually). This accountability-focused approach has positioned Texas among the top states for business climate and earned it prime consideration from site selection consultants nationwide.

If your business is pursuing expansion and weighing location options, Grantaura’s expert team can guide you through the complex TEF application process. Our grant specialists have helped hundreds of businesses secure funding through programs like the TEF, positioning them for growth while navigating compliance requirements. Contact Grantaura today to discover how our comprehensive grant services can turn your expansion plans into reality.

The Texas Enterprise Fund (TEF) is the nation’s largest “deal-closing” financial incentive program designed to attract new business and substantial business expansion to Texas. The fund provides performance-based cash grants to companies considering a Texas location that is actively competing with viable out-of-state alternatives.

The TEF was established by the Texas Legislature in 2003 with an initial investment of $295 million to strengthen Texas’s competitive position in attracting major business projects. Since then, it has become one of the state’s most powerful economic development tools, helping create over 100,000 direct jobs and generating approximately $33.5 billion in capital investment.

What makes the TEF particularly effective is its analytical approach to determining award amounts. Each application undergoes a uniform analytical model that calculates grants based on new jobs, hiring timeline, and average wages, with adjustments for total proposed capital investment. This ensures the state will see a full return on its investment through increased sales tax revenues during the contract period.

The program operates with strict accountability measures. No funds are disbursed until companies sign a grant contract and meet their job and wage targets for each reporting period. All TEF recipients must maintain these commitments throughout the contract term or face clawback provisions, which allow the state to reclaim previously disbursed funds.

Applications undergo a comprehensive 11-step due diligence process examining project competitiveness, corporate activity, financial standing, tax status, legal issues, credit ratings, economic impact, and comparison with competing locations. After this thorough evaluation, the Governor, Lieutenant Governor, and Speaker of the House must unanimously approve each award.

For businesses considering the TEF, Grantaura provides expert guidance through every step of the application process. Our team of grant specialists can help you develop a compelling proposal, navigate the due diligence requirements, and maximize your chances of approval. With our successful track record of helping businesses secure government funding, we can be your trusted partner in accessing this valuable resource for business expansion in Texas.

Focus: Business expansion, job creation, capital investment, economic development, performance-based incentives, corporate recruitment, manufacturing, technology, energy, advanced industries

Region: Texas, United States

Eligibility:
-Project must have a single Texas site in active competition with at least one viable out-of-state option, and no location decision made before application
-Project must create significant new jobs: typically more than 75 in urban areas or more than 25 in rural areas
-New positions must offer wages above the average for the county where the project would be located
-Company must demonstrate significant planned capital investment
-Project must have support from local city, county, and/or school district, especially in the form of economic incentives
-Applicant company must be well-established and financially sound
-Business must operate in an advanced industry that offers location options nationally or internationally
-Project must demonstrate a significant rate of return on the public investment

Benefits:
-Performance-based cash grants tailored to project scope and impact
-Award amounts based on job creation, hiring timeline, and wage levels
-Grants have historically ranged from under $100,000 to over $50 million
-No specified maximum award limit
-Funding available on a rolling basis (no fixed application deadline)
-Streamlined application and review process
-High-profile state support through governor’s office announcement

Deadline: Ongoing, rolling application process

Terms:
-TEF: Texas Enterprise Fund, the financial incentive program providing cash grants to businesses expanding in or relocating to Texas when competing with out-of-state locations
-Deal-closing grants: Financial incentives offered to finalize business location decisions when multiple locations are being considered
-Clawback provisions: Legal mechanisms in grant contracts allowing the state to reclaim funds if job creation or wage commitments aren’t met
-Due diligence: The comprehensive 11-step evaluation process examining project viability, company financials, and economic impact
-Performance-based: Referring to the TEF’s structure where funding is only disbursed after contractual job and wage targets are met
-Capital investment: Financial resources companies commit to facilities, equipment, and infrastructure
-Urban/rural distinction: Different job creation thresholds for eligibility based on project location (75 jobs for urban, 25 for rural areas)
-County average wage: The benchmark against which new job wages must be measured, requiring TEF-supported jobs to pay above this level