March 18, 2021
Q1 SMALL BUSINESS INDEX: SMALL BUSINESS OWNERS INDICATE A LONG ROAD TO RECOVERY
Tuesday, the U.S. Chamber and MetLife released the Q1 2021 Small Business Index—a survey of small businesses to take the temperature of the sector, see where small business owners are confident, and where they are experiencing challenges. The Q1 2021 index in particular focused on how the distribution of coronavirus vaccines is influencing the attitudes of small business owners towards the return to normalcy.

Among other insights, the Q1 Small Business Index finds that:
  • 54% of small businesses say the availability of coronavirus vaccines makes them feel more optimistic about their own business’s future
  • 59% of small businesses this quarter predict it will take six months to a year to get back to normal
  • 91% of small businesses are concerned about the pandemic’s effect on the national economy and 59% of small businesses rate the overall U.S. economy as poor

AMERICAN RESCUE PLAN RELIEF ALLOCATION SUMMARIES
Click here to view a breakdown of estimated state and local funding allocations through the American Rescue Plan.

Click here to view a breakdown of estimated state-specific education and childcare funding allocations through the American Rescue Plan.

The U.S. Chamber of Commerce will provide a summary of the American Rescue Plan later this week.
WHAT’S HAPPENING WITH INTEREST RATES?
Interest rates and inflation expectations have been in the news lately because both are rising. The increases are linked. The underlying causes are the improving economy and the extraordinary fiscal and monetary actions taken over the last year.

What’s happening? Interest rates are rising because the economy is improving fast as the virus recedes in the U.S. Many anticipate growth accelerating in the middle of the year as case levels fall further, service industries open back up in earnest, and consumers spend their recent relief payments and the savings they have compiled over the last year (about $2 trillion in aggregate).

An improving real economy causes interest rates to rise because investors seek less safety in low-risk investments like U.S. Treasury bonds, instead searching for better yields in riskier investments. At the same time, businesses are looking to invest more to capitalize on the improving economy. The competition for the investment funds drives rates up.

Since January 1, the ten-year Treasury rate has increased 61 basis points, from 0.93% to 1.54%. That is still a historically low rate (the 10-year was 2.71% in January of 2019, for instance, and that was relatively low), but a 61% increase in just over two months is a sharp uptick.
Why it matters: Higher interest rates on Treasuries will translate into higher mortgage rates, higher rates for business borrowers, and others taking on debt. The flip side is that it will mean higher rates for savers, who have seen almost 0% rates on their savings for over a year now.

The other factor driving up interest rates is the rising expectation of inflation. During the pandemic, Congress has injected trillions of dollars into the economy through stimulus payments and other spending. The Federal Reserve has also put trillions into the financial system. These actions have caused consumers, investors, and businesses to expect higher inflation soon. When they expect inflation, lenders require higher interest rates to account for their money losing value over time.

The difference between regular Treasury rate and inflation protected rates (TIPS) shows inflation expectations. At the beginning of the year, those differences showed investors expected 2% inflation. They now expect inflation closer to 2.4% – a more than 16% increase in a short period of time.

Bottom line: Look for interest rates continue to rise because of the improving economy. Inflation expectations are probably built-in for now. But if inflation rises more, those expectations will rise too and drive rates up further.

—Curtis Dubay, Senior Economist, U.S. Chamber of Commerce
AMERICAN RESCUE PLAN ACT AND THE RESTAURANT REVITALIZATION FUND
On March 11, 2021, President Biden signed into law the American Rescue Plan Act, a $1.9 trillion coronavirus relief bill that allocates new funds and tax credits to help struggling small businesses. This new bill includes targeted aid for restaurants in the form of grants, additional aid, and an expansion of existing credits such as the Employee Retention Tax Credit.

Billions in new grants specifically for restaurants
One of the most significant recent developments in the American Rescue Plan is the creation of the Restaurant Revitalization Fund (RRF). This new $28.6 billion grant program will specifically target hard-hit restaurants and bars, with restaurants able to apply for grants based on lost gross revenue between 2019 and 2020. The maximum grant size will be $5 million for restaurants and $10 million for restaurant groups. Those not eligible for the grants include any state- or local-government-owned entities or owners who own more than 20 restaurants. However, most franchise operators will be eligible.

Restaurant owners need to prepare right away to apply
All restaurant owners that want to apply for RRF grants should immediately register with the government using the System of Award Management (SAM). To become active on the SAM system, you need to follow these steps:
  • First, create alogin.gov user account.
  • Sign up for a DUNS number (this typically takes 1-2 days to process).
  • Using your login.gov, DUNS number, and standard business info such as your Tax ID Number, register with SAM (it can take up to 2 weeks to get the SAM number).

Secondly, you should work with an accountant to prepare relevant paperwork that clearly shows your gross revenue loss in 2020 as compared to 2019. For more resources and information click here.

Employee Retention Tax Credit (ERTC) extended through the end of 2021
In the December 2020 coronavirus relief bill, Congress expanded the Employee Retention Tax Credit (ERTC) to help struggling small businesses for the first two quarters of 2021. The American Rescue Act will further help those same businesses by offering the ERTC for the third and fourth quarters of 2021.

Click here for full article.
GOVERNOR'S SMALL BUSINESS RESOURCE PORTAL
The Office of Small Business Assistance is excited to announce the official launch of the Governor's Small Business Resource Portal! Whether you are an aspiring entrepreneur or an established business owner, the portal will provide you with the most relevant resources and contacts to help you find success. This important tool offers a customized list of useful business resources to assist in starting or growing a business in Texas.

The portal is easy to access and use—simply answer five short questions to generate your tailored resource list. For your convenience, you may print or email the results directly from the portal. 

Types of information included in the portal:
  • Federal, State and Local Resources
  • Business Advice and Growth Assistance
  • Funding Sources
  • Additional Specific Resources

We hope you will share the Governor's Small Business Resource Portal with your small business network and anyone interested in doing business in the Lone Star State.

NOMINATE YOUR FAVORITE SMALL BUSINESS FOR THIS YEAR'S SMALL BUSINESS AWARDS
You interact with hundreds of businesses each week. Now, think of those that are doing exceptional work, whose contributions to our community are elevating our region and who make your life just a little bit better. Got them in mind? Nominate them for the Small Business Awards Luncheon sponsored by America's SBDC at Texas Tech, Keep It Local Driven by First Financial Bank, Star Dodge Chrysler Jeep Ram and Hyundai.

Deadline is March 31

NEW BUSINESS OF THE YEAR AWARD The New Business of the Year Award is to recognize a new business Chamber member operating for more than one year and less than three years that has gained an expanding positive reputation. Nominees must have fewer than 25 full-time equivalent employees. Judging for this award will be based on potential community impact, use of innovation and technology as well as business growth.

SMALL BUSINESS YOUNG ENTREPRENEUR OF THE YEAR Chamber member, business owner who has owned their business for more than one year, under the age of 40 who has taken risks in business – started a new venture; expanded into a new area; taken on a difficult project; someone whose thinking is “outside the box”; an astute businessperson with a vision for the future.

THE COMMUNITY INVESTMENT AWARD is to recognize a local Chamber member business with fewer than 25 full-time equivalent employees, for its outstanding community service contributions such as special programs, partnerships, in-kind support of goods and services, employee volunteerism or other activities that have resulted in a positive impact on our community and citizens. Judges will consider all nominees for their impact, creativity, commitment and employee participation.

FAMILY-OWNED BUSINESS OF THE YEAR AWARD This award honors a family-owned and operated business with less than 25 full-time employees. The owner must also serve as a majority owner and operator or bear principal responsibility for operating a small business with at least 10 years. They must demonstrate increased employment opportunities for family members and non-family members.

You don't want to miss these upcoming events for
your business.

MARCH 18 BUSINESS BEFORE AFTER HOURS SPONSORED BY TOLAR SYSTEMS, INC. Monthly evening social business networking event. Open to sponsor employees and guests, Chamber members and prospective members. Features a short presentation and update on Chamber activities. Register here.

MARCH 24 SECURITY AWARENESS Did you know your team is your first line of defense when it comes to your business’s cybersecurity? Learn how to boost your defenses by training your team on Security Awareness. This virtual webinar is free and open to the public. Register here.

MARCH 25 & 26, APRIL 1 & 2 ELEMENTS OF SUCCESSFUL PHILANTHROPY VIRTUAL TRAINING SERIES The Friends of the Texas Historical Commission are leading this series on development training suited for large and small organizations from any discipline with limited development staff. They will highlight the best practices while facilitating dynamic group interactions to help attendees build and strengthen their fundraising "tool-kit" so they can more effectively and sustainably achieve their mission. Click Here to learn more and Click Here to Register Now.

APRIL 13 GOVERNMENT CONTRACT TRAINING Have interest in working with the government? Want to learn more about proposal writing techniques and pricing methods? Join us for this full day workshop on April 13 8:00 am - 4:00 pm featuring Sandra Burns, CEO, and Greg Hansen, CFO, of Project Solutions, Inc (PSI). Register here.