Small and Microenterprise Revolving Loan Fund (SMRF)

Fund Name:

Small and Microenterprise Revolving Loan Fund

Fund Acronym:



The Small and Microenterprise Revolving Loan Fund (SMRF) provides capital for rural communities to invest in new and/or existing small businesses and microenterprises. In cooperation with a qualified, nonprofit development organization (NDO), SMRF monies are loaned to local small businesses and microenterprises to support job creation/retention activity for predominately low and moderate income persons. Once the contractual job creation/retention requirements are satisfied, the contract is monitored for compliance and closed out by TDA.

At the local level, the NDO continues servicing the original SMRF loans, and repayments are deposited into a locally established Revolving Loan Fund (RLF) operated by the NDO. The RLF continues lending to small businesses and microenterprises, but the funds are no longer subject to Federal requirements nor further TDA oversight per Section 105(a)(15) of the Housing and Community Development Act of 1974 (HCDA).

Eligible Applicants:

Eligible applicants must be an incorporated, non-entitlement municipality submitting an application for 2018 Downtown Revitalization and Main Street Program (DRP/MS) funding. The city is responsible for the administration and success of the project throughout the term of the contract.

Non-entitlement cities are located predominately in rural areas and are generally:
-cities with populations of less than 50,000 persons;

-cities that are not designated as a central city of a metropolitan statistical area; or

-cities that are not participating in urban county programs.

While non-entitlement units of general local government are the only eligible applicants for TxCDBG funding, these applicants must submit applications that will provide benefits through a NDO serving an area within the applicant’s jurisdiction.

The following are examples of entities that may qualify as NDOs under HCDA Section 105(a)(15). The applicant should research any nonprofit under consideration to ensure that it meets the other requirements of HCDA Section 105(a)(15) discussed below:
-Small Business Investment Companies organized under 15 USC Section 681,
-SBA Section 504 Certified Development Companies,
-Community Action Agencies,
-Community Development Corporations,
-Local Development Corporations, and
-Community Housing Development Organizations (CHDOs) under the HOME program

In addition to qualifying as a nonprofit development organization under section 105(a)(15) of the HCD Act, the organization must meet the following requirements:
-The organization meets an IRS definition of a nonprofit organization;
-The organization is organized under state or local law to serve or carry out community/economic development activities which address the development needs of communities;
-The organization is independent of the local government; and
-The organization will be carrying out the initial specified activity.

Award Amount

Fixed Amount

Application and Guide:

2018 DRP/MS Application Guide - See Appendix IV for SMRF Application Guidance
2018 DRP/MS Application
2018 SMRF Supplemental Form
Please visit the TxCBDG Training Page for 2018 Application Training webinar dates and registration

For more information about the Small and Microenterprise Revolving Loan Fund, please contact Aubrey-Ann Gilmore by email at or by calling (512) 936-7894.