Expanding Access to Capital for Austin Small Businesses

AUSTIN, TX —  Austin’s small business owners will soon have increased access to financing and entrepreneurship opportunities following City Council action on September 24. The initiatives include a new Small Business Interest Loan Buydown Program, expanded matching support through the Austin Kiva Hub, and a development of a small business pitch competition in partnership with The University of Texas at Austin McCombs School of Business.

The Small Business Interest Loan Buydown Program, in partnership with PeopleFund, a Texas-based nonprofit, will use City funding to lower or eliminate interest costs on loans for eligible Austin businesses. The City is investing up to $500,000 in the pilot program, which is estimated to help leverage approximately $3 million to $4 million in lending and support 75 to 100 small business loans during its first year, depending on program demands and borrower credit eligibility. The program is designed to help local businesses invest more of their resources into operations, growth, and job creation. Eligible businesses must be for-profit and and located withinAustin’s ten council districts.  

In addition, the City is offering a matching component to the Austin Kiva Hub,. Kiva provides peer-to-peer microloans up to $15,000 at 0% interest with no fees or collateral required.  Through the new agreement, Austin Economic Development will establish revolving matching funds for eligible childcare businesses, businesses affected by disruptions, and graduates of City small business skills programs. Eligible borrowers may receive up to a 2-to-1 match through City-supported funds, helping them reach their fundraising goals. An estimated 200 microfund loans are expected, creating a $1.4 million impact to the small business community over the seven-year contract period.   

“Access to capital continues to be one of the most significant challenges facing small businesses..."

“Access to capital continues to be one of the most significant challenges facing small businesses, and these programs give Austin entrepreneurs more options to secure the resources they need to succeed,” says Austin Economic Development Director Mac Cummins. “These innovative programs will help lower borrowing costs, leverage community investment, and create new opportunities for local entrepreneurs to start, stay, and grow in Austin.”  

For Austin’s newest entrepreneurs, City Council has also authorized an agreement to develop a small business plan pitch competition. The program will be facilitated through a partnership between the City of Austin and The University of Texas at Austin McCombs School of Business. Participants will have opportunities to compete for prizes while receiving mentorship, pitch coaching, and feedback from experienced judges and business leaders. Additional details about eligibility, applications, and the competition are expected by 2027. 

To learn more about the Small Business Interest Loan Buydown and Kiva Microfunds programs, or other funding options, please visit the Small Business Division website at smallbizaustin.org.