Bellaire - Meyerland - West U Edition | May 2020


Uncertain outlook

Business owners face uncertain future as Houston economy gradually reopens

A survey of Greater Houston-area small businesses with fewer than 500 employees, conducted in early and mid-April, found almost a third have worsened their outlook in recent weeks. Among the survey’s ndings: Greater Houston area small businesses



we need to give everyone the right to be tested,” he said at a city press conference April 20. “I am challenging other CEOs to do the same.” Recouping losses To cover lost revenue, business owners have been able to apply to Small Business Association relief programs through two key programs: the Economic Injury Disaster Loan and the Paycheck Protection Program. A second round of funding, $310 billion, became available for the PPP on April 27, after the original $349 billion programwas exhausted in less than two weeks. According to the SBA and the U.S. Treasury, the rst round of the program processed 14 years’ worth of typical loan applications in less than 14 days. Chris Lyda, with accounting rm Lyda & Associ- ates, P.C., in Bellaire, assisted some area businesses with the application process for the PPP with limited success. “There were two clients that got approved, and one of them just barely made the cuto,” Lyda said. One of his clients received money within a week of applying in the rst round of applications that opened April 3. One group Lyda expressed concern over was the independent contractors and self-em- ployed individuals who were only allowed to apply for the program beginning April 10. “It’s turned out to be a confusing process for most people, like the application process, but also on how much can be forgiven,” he said. Other state and local relief eorts were also inun- dated with applications in April. Texas announced a $50 million relief fund for small businesses, and Harris County set up its own $10 million program April 6. Within a week, both programs received more applications than the funding available to them could fulll. In some cases, the private sector has stepped in to ll the gaps, such as the Save Small Business Fund set up by the U.S. Chamber of Commerce, provided grants of up to $5,000 to small businesses in ZIP

41% 47.1%

The state’s order to allowmore retail and restau- rant operations to resume signaled a potential path to normalcy, but how soon Houstonians will feel safe to congregate in enclosed spaces remains unclear as local leaders continue to push for increased testing capabilities. “We all know this isn’t going to go smoothly,” Houston’s Director of Emergency Medicine Dr. David Persse said April 20 about any eorts to reopen the economy. “We expect there to be some spikes, but what we don’t want to do is overwhelm the health care system.” As of April 30, all retailers and restaurants in Texas were permitted to open at 25% capacity. Those that require close contact or shared equipment such as barber shops, salons, gyms and bars were exempt from the rst two weeks of openings. City and county leaders appointed advisers in mid-April to draft phase-in plans for various sectors of the economy. However, Gov. Greg Abbott has said his directives supersede all local orders. Mayor Sylvester Turner said he hoped the gradual plan would prevent a surge of new infections, but he had concerns workers were being put at too high of a risk. “They aren’t asking when we’re going to open up. They’re asking, ‘Mayor, how are you going to keep us Abbott’s business strike force, tasked with forming statewide reopening plans, is made up of prominent business leaders including Houston’s own Jim “Mat- tress Mack” McIngvale. The strike force is chaired by Dr. John Hellerstedt, the state’s health commissioner. Hellerstedt and a team of three medical advisers are tasked with planning the state’s testing and contact tracing eorts. Abbott’s plan includes deployment of additional contact tracers and mobile testing sites throughout May. At two-week intervals, test data is reviewed to determine whether the next phase of openings may begin or if more restrictions need to be put in place, Abbott told reporters April 27. “It’s a fact: It’s hard to get rid of this virus because it is so contagious,” Abbott said at an April 27 press conference. “So we’re not just going to open up and hope for the best. Instead, we will put measures in place that will help businesses open while also containing the virus and keeping Texans safe.” While awaiting recommendations from state and local levels, some business owners started taking increased testing into their own hands. Taser Badar, CEO of Houston-based private equity rm ZT Corpo- rate, said he bought a supply of test kits to provide for all 1,200 of his employees for free. “Before we can require everyone to return to work, safe?’” he said. Draftingplans


Shut down whole or partial operations

Operations severely aected

Hiring freeze

Revenue decline

Future outlook on small business

Also, when asked how long their business could survive based on projections and without government assistance, they said:

Don’t know



6 weeks or less

3-6 months

6+ months

7-8 weeks






codes that were considered economically distressed before the outbreak. But within days of opening the fund April 20, the program closed, citing an “over-

whelming response.” Local interventions

Sallie Alcorn and Letitia Plummer, at-large Hous- ton City Council members who were vocal about the economic challenges the city was facing early on in the outbreak, said providing immediate monetary relief to businesses is nearly impossible under the city’s budget constraints. Despite that, Alcorn started looking to other cities to see which policies, such as grace periods for commercial rent, could be enacted by the council. Plummer pushed for the formation of a committee to study such policies, something Dallas City Council had done in March, but plans had not moved forward as of press time. She said she continues to reach out to business owners for insight. “We’re focusing on a disease right now, and I get that. There are a lot of people jumping into help,” Plummer said. “I want to focus on the fallout.” One option Turner has oated is nding a way to allocate federal disaster recovery money, typically reserved for commercial and residential structural damage, to business owners as a way to recoup losses sustained during the restrictions. As of press time, a formal agreement with the federal government had not been reached. Hunter Marrow contributed to this report.

Programs preferred by a national poll of small business owners: Small-business lifeline

Waiving SBA-nancing

requirement 20%

Temporary cancellation of

business payroll taxes 21%

30% Small-business access to disaster loans from the SBA 56%

Direct cash payments to every American




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