Funding Resources for Small Business

Texas is known as a favorable climate for business based in part on our comparatively low tax burden (we know from surveys that it definitely does not feel low to most of you) and favorable regulatory environment. Surprisingly, costs for some of the basics business needs like real estate, energy, wages, and taxes are lower in Texas than in the rest of the country. In 2018, these costs were 2% below the national average! Austin has more than 54,000 businesses with less than 100 employees, as recorded in the 2019 census. This impressive count may be due in part to the amazing resources available to local businesses in Austin. As every business owner knows, funding is one of the most important pieces of a solid business plan. Except for the independently wealthy among us, we all need funding to start a new business or to grow an existing one. Below is a brief outline of some of the funding resources available to Austin businesses.

ACCION Texas is a financial support system for small businesses that advances racial, gender, and economic justice for all.  They are a nonprofit organization that provides credit to small businesses with at least 12 months in business, $50,000 or more in annual sales, owner of at least 20% of the business, owner at least 18 years or older.

Bank loans are obvious place to look for funding for a new business is to your bank. Some small local banks are more willing to work with new business owners and have non-traditional programs. Even with some banks working hard to support small business, it can still be very hard to qualify for bank loans.

BCL of Texas supports Texans to acquire wealth-building assets, such as home ownership and entrepreneurship, with the financial tools and education necessary to build personal net worth. They are a U.S. Treasury Certified Development Financial Institution (CDFI), a U.S. Small Business Administration Certified Development Corporation (CDC), and a HUD-certified housing counseling agency. They offer loans of $5,000 to $50,000 for small businesses.

Business Investment Growth, BiGAUSTIN is certified by the U.S. Department of Treasury as a Community Development Financial Institution (CDFI). They operate as a nonprofit providing training and loans to small businesses, especially minority- and women-owned businesses, in Central Texas. They lend up to $15,000 to start-ups and up to $50,000 for established businesses and have 1 – 6 year payback terms.

Capital CDC is a private, non-profit provider of small business financing throughout Texas, New Mexico, and Arkansas offering SBA 504 loans for fixed assets such as land or buildings. Additionally, they offer a Community Advantage Loan Program as a companion loan to assist small businesses in “under served” markets with the financing of working capital.

Family Business Loan Program is a public-private partnership between the City of Austin, HUD, and participating private lenders to offer low-interest loans to qualified small businesses that are expanding and creating jobs. They offer low interest rates, flexible repayment terms, and low equity requirements.

LiftFund provides credit and services to small businesses and entrepreneurs who do not have access to loans from commercial sources through direct capital including SBA microloans, SBA Community Advantage, SBA 504 Loans, EDA Loans in a 14-state footprint.

PeopleFund is a nonprofit organization, a U.S. Treasury certified Community Development Financial Institution (CDFI) and a SBA certified lender. Lends up to $250,000 to Texas businesses that do not qualify for bank loans and provide complimentary client business assistance and education.

Small Business Investment Company (SBIC) are privately owned and managed investment firms that use their own capital, plus funds borrowed at favorable rates with an SBA guarantee, to make venture capital investments in small businesses. They are licensed and regulated by the SBA.

Texas Venture Capital and Private Equity Directory provides investment firm profiles and financing frequently updated. This directory serves local entrepreneurs looking to raise capital, investors who wish to network with other investors and service providers who need a directory of investment firms.

U.S. Small Business Administration (SBA) operates a number of programs designed to assist small businesses access financing from lending institutions. You must go through the normal application process for an SBA loan. As a large government funding operation, they have many resources to offer.

Veteran Business Initiative is a public private partnership between the City of Austin in conjunction with the U.S. Department of Housing and Urban Development, which offers a low-interest rate loan and low borrower equity requirements to help create or expand a business. They offer low interest rates, flexible repayment terms, and low equity requirements.

Austin Enters Stage 4 COVID-19

Austin and Travis County have entered stage 4 of the Austin Public Health risk guidelines as Covid-19 case numbers and hospitalizations continue their recent rapid increase. This move comes just on the heels of the move to stage 3 a week ago. Officials are asking everyone to wear masks indoors, even if they’re partially or fully vaccinated.

These stage 4 guidelines include asking vaccinated residents to wear masks at private indoor gatherings and at outdoor gatherings if social distancing is not possible and masking while traveling, dining and shopping. Unvaccinated or partially vaccinated residents should avoid private indoor and outdoor gatherings, and travel, dine and shop only if it is essential (with masks).

Advice for protecting your employees and your customers can be found here from the City of Austin’s Covid-19 Economic Recovery site: https://www.austintexas.gov/economicrecovery.

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Austin Moves to Stage 3 Covid-19 Risk Level

On Thursday, July 15th, Austin city officials moved from Stage 2 to Stage 3 covid-19 risk based guidelines due to a rise in new cases, which doubled, and hospitalizations, which neared 20, in the preceding days. This move reflects the City’s stated goals to follow science and data to guide risk level decisions. No new recommendations for businesses were included in the announcement of this move. As a reminder, stage 3 recommendations include the following:  fully vaccinated individuals can participate in indoor and outdoor private gatherings and dine and shop without masking (if allowed by the business) and can travel with masking; partially vaccinated or unvaccinated low-risk individuals can participate in indoor and outdoor private gatherings, dine, shop, and travel with masking; and partially vaccinated or unvaccinated high-risk individuals should avoid non-essential indoor and outdoor private gatherings, dining, shopping, and travel. 

The guidelines are careful to note that “everyone should continue to follow any additional requirements of local businesses, venues, and schools regardless of vaccination status or stage,” which reinforces a business owner’s right to require masks if they choose. Reasons to continue to require masks include a desire to protect customers and employees who may not be eligible for vaccination and to help prevent the spread of the disease to children who do not yet have the ability to receive a Covid-10 vaccine. We published an editable flyer for business owners to use should they decide to continue to require masks. Request a copy here.

Questions about how to modify your operations? Issues with implementing or eliminating mask requirements with employees or customers? Ideas for best practices that you’d like to share? We are here for all of it – reach out at hello@ibuyaustin.com.

To Mask or Not To Mask – STILL the Question?

The CDC’s announcement stating that fully vaccinated adults can safely resume indoor and outdoor activities in groups of any size without masks or distancing was a major milestone in the fight against coronavirus in the United States, and the latest in a set of sudden and unexpected decision points for local businesses. We heard from many owners that they felt pressure to again make sweeping changes to their operations in the wake of this announcement.

While everyone is thrilled to hear some good news on the COVID front, business owners need not rush to change their protocols in a matter of days. Having weathered many shifting regulations over the past year, we encourage business owners to take their time in coming up with how and when they choose to relax their mask policies. Those who feel comfortable dropping mask requirements entirely may still want a week or two to revamp policies and check in with employees. Request an editable copy of this handy flyer to post at your locations, or use this or similar language to set expectations for your customers.

As always, we are here to help you get through this next phase. Reach out here if there’s anything specific we can do to help as Austin and the rest of the country open back up

Austin Public Health Vaccination Pre-registration System

Austin Public Health launched an online COVID-19 vaccination pre-registration system. The pre-registration is only for the vaccines that APH receives, not for other vaccine providers in Austin-Travis County. A link  tree for other possible provider wait lists is available here. If you have private insurance, you are encouraged to call your primary care provider or pharmacy first. Please note that Austin Public Health is currently vaccinating only those residents who meet the criteria for Phase 1A or 1B, which includes healthcare workers, residents and staff of long-term care facilities, and individuals who are 65 years or older. If you meet that criteria and appointments are still available, you will be allowed to schedule an vaccination appointment. If you are not eligible or appointments are full, you will be placed on a waiting list and notified in the future if and when additional vaccines become available to APH. Appointments are required and, to protect patient privacy, locations will only be available to those with scheduled appointments. Citizens can pre-register here AustinTexas.gov/COVID19-Vaccines.

Governor’s Order (GA32) Drops Business Capacity to 50%

On January 10, the Governor of Texas announced additional COVID-19 occupancy restrictions due to worsening conditions in the region. Under Order GA 32, if any area has COVID-19 hospitalizations that represent 15% of overall hospitalizations for seven consecutive days, additional restrictions on businesses and hospitals must occur. Austin-Travis County is part of Trauma Service Area O, which encompasses 11 counties in Central Texas and is effected by this new order.

The restrictions outlined in GA 32 are required and are not optional for local jurisdictions. Businesses, including restaurants and retail, are required to move to 50% occupancy (from 75% occupancy). Additionally, hospitals are required to stop elective surgeries.

In a statement Dr. Mark Escott, Interim Austin-Travis County Health Authority, said “we are incredibly concerned that our area has hit the hospitalization rate which has resulted in the rollback on the occupancy of businesses. The projections have been concerning for some time, and this is just the latest reminder that Austin-Travis County is experiencing a deadly surge in cases as a result of holiday gatherings and gatherings thereafter. The additional restrictions placed by GA 32 alone, though, will not be enough to counterbalance this surge in cases and hospitalizations. In other jurisdictions that hit this point prior to the Austin area, cases and hospitalizations continue their uncontrolled rise. Dallas/Fort Worth is at 27%, San Antonio at 22%, and Houston at almost 20% and all three continue to rise. We need every person in this community to understand that exceeding our hospital capacity is now inevitable, but how far we exceed that capacity depends on all of us. Today is the day to decide to stay home and reduce risk to save our hospitals and save lives.”

This announcement comes one day after Austin-Travis County activated an Alternate Care Site (ACS) to take specific COVID-19 low-acuity patients in order to relieve stress on local hospitals. Stephanie Hayden, Austin Public Health Director, warns residents that “it is critically important that everyone follow protective measures at this time. Wearing a mask, washing your hands, watching your distance, and avoiding gatherings have been lifesaving measures throughout this pandemic. We will not be able to vaccinate or enforce our way out of the surge already happening, so we need to take it upon ourselves to protect our community.”

Questions about details of the Governor’s Order or the Governor’s announcement should be directed to the Governor’s Office and more information about COVID-19, visit AustinTexas.gov/COVID19.