Carolyn Rodz of Hello Alice and Aziz Gilani of Mercury Fund discuss their advice for startups looking for federal grants. Courtesy photos

The United States Congress recently passed the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, and it includes several initiatives that provide financial relief for startups and small businesses — but there are a few things these companies should know about the programs.

Houston Exponential hosted a virtual panel with Carolyn Rodz, CEO of Hello Alice, and Aziz Gilani, managing director of Mercury Fund. They broke down some of the concerns with some of the most popular programs.

The Payroll Tax Deferral stipulation allows you to push back paying your payroll tax, which is 6.2 percent of payroll, Gilani says in the livestream. Companies will be required to pay back half that tax in a year's time and the other half in two year's time.

Small businesses can also apply for emergency Economic Injury Disaster Loans, or EIDL loans, that won't require the first payment for a full year. The interest rate is 3.75 percent for for-profit businesses and 2.75 percent for nonprofits with up to a 30-year term. Businesses could even submit to receive a $10,000 grant on their application.

Then, there's the Paycheck Protection Program, or PPP.

"The PPP program is probably the most lucrative of the three programs for startups," says Gilani, "It's the one that has the largest financial impact."

To submit for PPP, business owners look at their last year's worth of payroll and utility expenses, then average out their monthly expenses, and multiply that by 2.5. Small businesses can submit for that amount or up to $10 million. If the loan is spent on their employees and utilities, it's turned into a grant and not required to be paid back. Gilani recommends checking with the SBA for the specific details, but notes that contract workers can't benefit from PPP and must submit individually for aid.

Regarding these programs, Rodz and Gilani shared some other advice as it pertains to Houston's small businesses and tech startups.

Apply ASAP

Banks are already overwhelmed with applications, and some have paused accepting new applications from some entities. Plus, you have no excuse, Rodz says, since the application is simple and can be completed in one sitting.

"Compared to what a normal government loan application looks like, it is light years better in terms of simplicity," says Rodz.

Go to your own bank

Banks are giving priority to existing customers, Rodz explains.

"Go talk to your banker, and really take the time," Rodz says. "They are prioritizing the clients they have relationships with."

There's a technical reason too, Gilani adds. It's easier for banks to submit for a pre-existing customer, and new customers require more paperwork.

Document everything

Currently, Gilani says, the way the program is working right now is it relies on good-faith self-certification of the business owner. The banks, based on approval, will just put the federal money into your bank account. However, there are people put in roles for this act that will come back to verify that everything was honest.

"Lying to the federal government about money they grant you is a felony that comes with jail time," Gilani says. "It's very important that — after all this craziness passes by and the government comes back to audit what happened — you have a lot of documentation in place in order to show that you were fulfilling your good-faith requirement of answering these questions honestly."

Gilani recommends keeping track of how you calculated your payroll, as well as being able to show the effect of the crisis is key. Then, after you receive the funds, you need to be able to show that you used the funds on your employees.

Consult a lawyer if you have questions on eligibility

There's been a lot of discussion on whether or not venture-backed startups qualify for PPP.

"One of the challenges of the program is that it is being administered by the Small Business Administration, which traditionally hasn't worked with venture-backed and angel-backed companies," Gilani says.

Usually, the SBA requires startups to indicate their employee count, which is not to exceed 500. However, if the company is venture-backed, the SBA requires the inclusion of all the employees of all the portfolio companies. Certain legislators have expressed that this wasn't the intention of the program and are working to provide solutions, Gilani explains, and he and Mercury Fund have been working with a legal team to find immediate work arounds.

"There have been lots of lawyers who have been working really hard on trying to solve this problem," Aziz "If anything, we've now created the lawyer stimulus act in the amount of billable hours we've had trying to figure out this problem."

Gilani also recommends getting your lawyer to sign a document confirming that, especially if you are a venture-backed company, that you intended to adhere to the rules of the program.

Small businesses and startups are likely to hurt — and hurt bad — from COVID-19's affect on the economy. Here are some resources to get support. Photo by Hero Images

Here's a list of resources for Houston startups and small businesses during COVID-19 shutdown

here to help

It's a trying time for the world, and Houston small businesses and startups have been put in a difficult spot. From having to work remotely or being forced to close or scale back operations due to mandates from the government, entrepreneurs are having to figure out their new normals.

However, organizations have leapt at the chance to help their fellow Houstonians, and a number of resources have appeared to provide aid to startups, from advice and resources to grants.

Editor's note: This article originally ran March 25, 2020, but has been updated and republished with more resources.

The Cannon's CERT Program

The Cannon released information about their Cannon Emergency Response Team Program, and Houston startups can apply online. The multi-week program is intended to provide aid and support for startups and small businesses experiencing a crisis caused by external forces — namely COVID-19 and its repercussions, but also natural disasters, market disruption, legislative actions, civil unrest, fraud, or theft.

Click here to apply and learn more.

The Ion's resource center

The Ion has also rounded up resources for its members and the greater Houston innovation ecosystem. It's available online, and has everything from links to national and local resources and financial assistance information to virtual events.

"While we all try and adjust to this new way of life, The Ion will continue to be a resource to our entrepreneurial community the best way we know how, by connecting our community and providing you with opportunities that you need to be resilient during these unstable times. ... We hope this page serves you well and we promise to keep you all up to date on everything innovation taking place in our community," writes Gaby Rowe, executive director of The Ion.

Rowe has also started a video series of interviews with Houston startups — the videos are also available on the webpage.

Click here to access the resource center.

Houston Exponential's virtual event calendar

Houston Exponential worked quickly to turn their online calendar featuring events across the innovation ecosystem in Houston to helpful virtual events. Anyone can submit an event for consideration.

Click here to find the calendar.

To find InnovationMap's curated list of events for April, click here.

The GHP's Greater Houston Business Recovery Center

The Greater Houston Partnership has released a one-stop shop for business help for companies large and small. The amalgamation combines several national and local options, including relevant information about the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

"We know many Houston companies are hurting and do not have the resources to sustain themselves for weeks without help," said Bob Harvey, president and CEO of the Partnership. "The funds provided through the CARES Act are essential to ensure Houston businesses can meet payroll and cover other expenses during this difficult time. "

Click here to visit the Greater Houston Business Recovery Center page.

Fat Finger's procedure app

In an effort to help businesses organize their response, Houston-based tech company Fat Finger has released a procedure app that is available for free. It offers employee agreements, important protocol checklists, and more.

"Our intention is to help teams of all types operate as safe and effective as possible to overcome what we are all going through," writes James McDonough, founder and CEO of the company.

Click here to learn more about the app here.

Houston PR firm to offer free services

Houston-based Paige PR is offering up $5,000 worth of its services to help out a company affected by COVID-19., which includes media relations, influencer relations, media training, employee communication, content development, social media management, corporate event planning, campaign measurement, brand management, community engagement and crisis communication, according to a news release.

"Paige PR's mission is to empower and help businesses tell their unique stories and amplify their messages," says Paige Donnell, Paige PR's founder and CEO, in the release. "Our team wanted to give back and honor a company making a positive difference, despite these uncertain times. Now is not the time to halt your company's marketing and communication efforts. However, we understand that this may be the only option for some businesses. We're in this together, and all of us at Paige PR look forward to offering our services free of charge to one deserving company."

Click here to learn more and enter your company.

Gener8tor's free 1-week response program

Just like most accelerator programs, cohort schedules and plans have been affected by COVID-19, but one new-to-Houston program is making some lemonade out of the lemons they were served. Gener8tor, along with the Downtown Redevelopment Authority, announced a partnership for one week of virtual programming for small businesses affected by the COVID-19 outbreak. It's free and an extension of the gBETA program, which launched in Houston in January.

Interested entrepreneurs must apply to be enrolled by Friday, May 27. The week of virtual assistence begins March 30 and goes until April 3. Participants will have access to virtual office hours with experts.

"We have seen firsthand the impact that entrepreneurs have on a community and we hope to call on our network of mentors, investors, and partners to support these new Emergency Response Programs," says Joe Kirgues, Co-Founder of gener8tor, in a news release.

Click here to learn more and sign up.

Hello Alice's business center

Houston-based Hello Alice is a great digital resource for startups locally and beyond. The organization recently announced its grant program that will focus on funding minority-founded startups and quickly snapped into action to create a COVID-19 Business Center free for entrepreneurs to use.

Alice is offering emergency grants to businesses affected by COVID-19 and has also gathered other resources like mental health information, tips for running a remote workforce, and more.

Click here to access the business center.

The Small Business Administration's webinars and disaster loans

Startups, nonprofits, and small businesses can apply for an Economic Injury Disaster Loans for up to $2 million. For small businesses, the interest rate is 3.75 percent, and for nonprofits, the interest rate is 2.75 percent. The SBA's Houston chapter is available for help as well.

Click here to learn more about the EIDLs.

Impact Hub Houston's comprehensive list

If this list here isn't exhaustive enough, Impact Hub Houston has gone the extra mile on their blog, creating a comprehensive and updated list of resources for small businesses and startups, as well as for people in general. There is everything from information on small business financial help and online education to tips for parents and health-related resources.

Click here to access the guide.

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CultureMap Emails are Awesome

Texas named a top state for women-led startups

this one's for the ladies

Who runs the world? According to Merchant Maverick's inaugural Best States for "Women-Led Startups'' study, Texas is a great place for women to be in charge.

The Lone Star state cracked the top 10 on the list, earning a No. 6 spot according to the small business reviews and financial services company, which based the study on eight key statistics about this growing segment of the economy. Colorado (at No. 1), Washington, Virginia, Florida, and Montana were the only states to beat out Texas on the rankings—leading the Merchant Maverick team to conclude that "the part of the country that lies west of the Mississippi is great for startups led by women entrepreneurs."

Women-led startups in Texas received $365 billion in VC funding in the last five years, the report found. This is the seventh largest total among U.S. states. Too, about 20 percent of Texans are employed at woman-led firms, which is the fifth highest percentage among states. Roughly 35 percent of employers in Texas are led by women.

A few other key findings that work in female founders' favor: The startup survival rate in Texas is nearly 80 percent. And a lack of state income tax "doesn't hurt either," the report says.

Still there are shortcomings. On a per capita basis, only 1.27 percent of Texas women run their own business. The average income for self-employed women is also relatively low ranking among states, coming in around $55,907 and landing at 31st among others.

This is not the first time Texas has been lauded as a land of opportunity for women entrepreneurs. A 2019 study named it the best state for business opportunities for women. Houston too has proven to support success for the demographic. The Bayou City was named in separate studies a best city for female entrepreneurs to start a business and to see it grow.

Still, as many findings have concluded, the realities of the pandemic loom for all startups and small business owners. The Merchant Maverick study was careful to add: "The pandemic has changed the economic landscape over the past year, and often for the worse.

"This means that not every metric may be able to accurately gauge how a state might fare amidst the pandemic," the report continues. "To help factor in COVID's impact, we included some metrics that take 2020 into account, but it will be a while until we get a full picture of the pandemic's devastation.""

New downtown office tower will rise in bustling Discovery Green

new to hou

A new office tower will soon loom over the popular Discovery Green as the anchor of a new downtown district. Global development and construction firm, Skanksa, announced the new building at 1550 Lamar St. and its anchor tenant on January 13. The new 28-story, 375,000-square-foot Class-A office structure is dubbed 1550 on the Green, per a Skanska statement.

Global law firm Norton Rose Fulbright will relocate its Houston office in 2024 and acquire naming rights upon occupancy, according to a press release.

Bound by La Branch, Lamar, Crawford, and Dallas Streets, 1550 on The Green will feature extra-wide pedestrian zones with a canopy of trees, two tenant outdoor roof terraces, and wide views of the surrounding greenery.

International design firm BIG-Bjarke Ingels Group led the building's design; it is the company's first foray into Texas. BIG's design promises sustainability, energy efficiency, and an "airy" office environment for tenants, a release describes.

Some 7,000 square feet of retail space will greet first-floor guests. Michael Hsu Office of Architecture has been tapped to design the interior amenity spaces; those include a fitness center, rooftop event space and terrace, and community spaces.

The new 1550 on the Green tower is part of a new envisioned district that will be branded as Discovery West. The district will consist of 3.5 acres of mixed-use development boasting restaurants, retail, green space, and "world-class architecture," per a release.

Working with Central Houston Inc., Discovery Green, Bike Houston, the Kinder Foundation, as well as several brokers, Skanska and design firm of record, BIG-Bjarke Ingels Group, completed the master plan for Discovery West in early 2020.

Skanska has been noticeably active in the Houston office market, specifically with the development of Bank of America Tower, West Memorial Place I and II, and the future Discovery West. The company is behind the acquisition of a buzzy strip center in Montrose. Skanska also plans to multifamily to its Houston portfolio, the firm notes.

"As an organization that prides itself on building what matters to our communities, our team, made up of Houstonians, has been working alongside local stakeholders to develop a plan and a building that will transform this side of downtown Houston while still meeting the needs of the city," said Matt Damborsky, executive vice president for Skanska USA commercial development's Houston market, in a statement.

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This article originally ran on CultureMap.