A new state law requires matching funds for capital projects—a provision many business owners haven't heard about yet.
Most Louisiana restaurant owners don't realize that a provision buried in the state's capital outlay bill could affect their ability to access state funding for renovations, equipment, or facility improvements. Here's what changed, and why it matters to your business.
HB2 is Louisiana's comprehensive Capital Outlay budget—the legislation that appropriates state money for infrastructure and facility projects across the state. Tucked into that bill is a requirement that applies directly to restaurants and other small businesses: any non-state entity receiving a capital outlay appropriation must now provide matching funds.
In plain terms, if your restaurant applies for a state capital grant—whether for a new kitchen, dining room renovation, or other facility work—you will be required to contribute your own money to match the state's investment. The state will not fund the full project cost.
This applies to restaurants, bars, and other food service businesses that are not state-owned entities. It also applies to nonprofits, local governments, and other private organizations seeking capital outlay funding. If you've ever considered applying for state infrastructure money, this requirement now applies to you.
The matching funds requirement is a direct condition of receiving the appropriation. If you cannot or will not contribute matching funds, you will not be eligible for the state grant.
For undercapitalized or cash-strapped restaurants, this is a significant financial hurdle. You'll need to have capital available—or access to financing—to match whatever the state contributes. A restaurant with limited reserves may find itself unable to pursue state funding opportunities it could have accessed before.
For example, if the state offers a $50,000 grant for equipment or facility work, you may now be required to contribute $50,000 of your own money to receive it. The exact matching percentage is not specified in the provision itself; that detail may be set in individual appropriations or implementing regulations.
This also affects your planning timeline. Before applying for state capital funding, you'll need to assess whether you have the cash or credit capacity to meet the matching requirement—an extra step in the decision-making process.
The provision is found in Section 8(F) on Page 156 of HB2. It becomes effective upon the governor's signature and applies to capital outlay appropriations for Fiscal Year 2026-2027 and beyond.
If you're considering a capital project in the next budget cycle, now is the time to understand this requirement and plan accordingly. Talk with your accountant or lender about whether matching funds are feasible for your business.
For a detailed, business-specific guide to HB2's capital outlay provisions, contact your local restaurant association or chamber of commerce.