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About the Houston Small Business Economic Relief Program (SBERP)
CITY OF HOUSTON - SBERP
In March 2020, businesses deemed as non-essential in Houston were forced to close their doors due to the COVID-19 pandemic. A survey by the Greater Houston Partnership showed that four in ten member businesses indicated they could survive a slowdown for only four weeks or less. The survey also showed 91 percent of member businesses with 500 or fewer employees had lost revenue, more than one-third had laid off workers, and about half were not paying employees.
In a Financial Pulse Survey conducted by the Office of Business Opportunity (OBO), 58 percent of respondents secured the U.S. Small Business Administration’s (SBA) Paycheck Protection Program (PPP) funds, yet only 40 percent found those funds to be enough. Of the 30 percent who secured the SBA’s Economic Injury Disaster Loan (EIDL), only 15 percent found those funds sufficient.
In response to the grim outlook and results of the surveys, the City of Houston, led by OBO, took action to assist small businesses economically and financially impacted by the pandemic by creating the Small Business Economic Relief Program (SBERP).
The program, with an initial allocation of $15 million of Federal CARES Act funds, was presented to the Mayor and Houston City Council and was unanimously approved on July 28, 2020. Due to the overwhelming number of grant applicants and the continued need for immediate, short-term assistance to small businesses, Mayor Sylvester Turner and Houston City Council approved additional infusions of funds for the SBERP in 2020 – $5 million in September; $5 million in November; and $10 million in December.
Under the SBERP, the maximum grant amount eligible businesses and chambers of commerce were able to receive was $50,000. Permitted use of grant dollars included such things as payroll, accounts payable, rent, mortgage, personal protective equipment (PPE) for employees, and marketing strategies, including creating an online presence and other sales alternatives. Businesses were required to be located within the Houston city limits. The SBERP application portal was open for two weeks from Aug. 19 - Sept. 4, 2020. More than 12,000 businesses applied for grant funds.
To allow equitable distribution of funds and to achieve the goals of the SBERP, grant applications were not selected for processing on a first-come, first-served basis, but rather prioritized based on categories which included, but were not limited to financial need, geography, access to capital challenges, resiliency, and job retention impact.
In addition to meeting the core eligibility requirements, applications were processed using a business profile that took into consideration such factors as three months revenue (based on business’ Profit and Loss statements and other financial documents), business size, cash flow, capital on hand, and other variables.
Grant funds were disbursed in two phases. The first half of the funds were awarded upon grant approval. The second half was awarded after confirmation that the grant recipient successfully completed the required Recovery and Resiliency Technical Assistance component of the program. This component included assistance in strategic planning, financing, marketing and human resources management.
The SBERP helped 1,072 small businesses sustain their operations with the average grant amount totaling $30,000. Recipients of the grant included micro-businesses with five or less employees, as well as businesses that weren’t able to obtain any other type of financial assistance from other economic relief programs such as the PPP and EIDL. As of December 30, 2020, all SBERP funds were disbursed to grant recipients.
–Marsha E. Murray , OBO Director
