Texas Leverage Fund

The Texas Leverage Fund (TLF) offers added sources of financing to communities that have adopted the economic development sales tax. The TLF is a successful and popular economic development financing tool that offers communities a cost-effective alternative to bond issuance. The TLF allows communities to leverage future sales tax revenues to support job retention or creation. The Fund may be used to provide financing to local businesses for industry expansion or recruitment, industrial parks establishment, or certain community project financing.

The Office of the Governor, Department of Economic Development Finance, which administers the fund, may loan funds directly to a local EDC to finance the costs of eligible projects. Examples of eligible costs include land, buildings, machinery and equipment for manufacturing and industrial operations. Favorable terms are available for either long-term or interim financing with maturities of up to 15 years.

Future sales tax revenues serve as collateral for loan repayment and sales tax revenues pledged by the EDC need only be sufficient to cover projected annual debt service as specified in the TLF program guidelines. Pledged tax collections not needed for actual debt service are available for other projects. This allows cities to leverage their economic development sales tax and to pursue additional projects.