Another Forgivable-Loan Option

You can get up to eight months of principal and interest forgiven on SBA loans. Can the U.S. bring manufacturing back from China? And do you know what your revenue-to-employee ratio means?


Gene Marks reports that the new stimulus bill offers a forgivable-loan option beyond PPP: “If you’re a small business looking for an incredible financing deal, regardless of whether you’ve been affected by the pandemic, then pay attention. Why? Because the new stimulus bill now forgives up to eight months of principal and interest payments on Section 7(a) and 504 Microloans from the SBA. Yes, the government will pay for a portion of your debt. So if you want to take advantage of this unprecedented benefit, you’ll need to become more familiar with the SBA’s Section 7(a) and 504 loan programs.”

  • “If you get a new Section 7(a) or 504 Microloan before Sept. 20, then your first six months of principal and interest (up to $9,000 a month) will also be forgiven.”

  • “What’s unique about these loans is that you don’t have to show that your business has been impacted by Covid. And even if you have an existing Paycheck Protection Loan, you can still apply.” READ MORE

Loan expert Ami Kassar will discuss the changes to the SBA loan programs in a Webinar on Thursday. REGISTER HERE


In yesterday’s Morning Report, Paul Downs explained why he likes to ask business owners about their revenue-per-employee ratio. That struck a chord with Shawn Busse, founder of consulting firm Kinesis: “I’ve been tracking that ratio forever. For service-based (and usually knowledge work—not janitorial, for instance): $100k or less and you’re in trouble. $125k means you’re starting to figure stuff out. $150k probably means 10 percent net or higher and a generally healthy business. $180k and you’re on to something special; remarkable team, process, client base.”

  • “$200k usually means some unique IP or integration of recurring passive revenue (and the other stuff at earlier points). It might also mean you’re in a blue ocean and competition hasn’t yet caught up. I’d say these folks are in the 20-to-30 percent net income level.”

  • “In all my years, I’ve only seen a few handful of clients hit the 200k mark. One was in manufacturing, but that was done with automation and lots of custom services (more like a knowledge work business).” JOIN THE CONVERSATION


Building a bank for business owners: We've heard from business owners like you that banks aren't addressing your needs. We want to understand your pain points so we can build your ideal bank. Please take less than a minute to tell us in this survey what you are looking for in a bank. Your answers will shape the future of business banking as we know it. Thank you!


Divvy, a fintech company that claims to help small businesses eliminate expense reports, has a valuation of more than $1 billion: “Thousands of small businesses have permanently closed during the pandemic after being forced to shut down to stem the spread of Covid-19. For those that remain, accessing capital and gaining control over finances have been paramount. Demand for Divvy’s products has surged during the pandemic, with monthly sign-ups climbing 500 percent since March, the company said in a statement Tuesday.”

  • “Divvy says its technology is designed to cut down on the time it takes managers to process expense reports.”

  • “It provides its software for free, taking a small part of the fee merchants pay banks each time a customer uses one of its [credit] cards. More recently, the company has been focused on building out its offerings focused on paying bills.” READ MORE



The company that created Fortnite is buying a dying mall for its headquarters: “Epic Games, the closely held company based in Cary, N.C., said it is planning to convert the 980,000-square-foot Cary Towne Center mall into offices and recreation space for its growth in the long term. Epic plans to open the new campus by 2024, which would represent a sizable upgrade from the company’s 250,000-square-foot headquarters. The acquisition and office-expansion plans show that even as many companies aim to reduce office space and embrace work-from-home policies, others still see a new and larger office location as a big part of the future.”

  • “Epic’s acquisition plan also shows how many underperforming malls have become attractive acquisition targets for investors aiming to convert them to other uses, from office space to residential units or warehouses.” READ MORE


Amazon has promised to spend more than $2 billion on affordable housing near three of its hubs: “Many housing advocates have welcomed these contributions, saying large employers like tech companies have played a role in driving up home prices by attracting well-paid workers who can pay more for housing than longtime residents. But advocates also say these investments aren’t expected to solve the housing shortages for lower and even middle-income earners in these expensive metro areas. Solving the country’s affordable-housing crisis would require policy changes and government spending, not just private-sector investments, said Chris Herbert, managing director of the Harvard Joint Center for Housing Studies.”

  • “‘It’s going to take a much larger investment of resources to address the problem at a scale that’s needed,’ he said.” READ MORE


InReturn Strategies is attempting to help Americans with disabilities find jobs: “Companies looking to hire workers with disabilities usually follow traditional hiring channels, which often include processes that can be exclusionary. Meanwhile, access providers — organizations offering services to people with disabilities — don’t tend to have many connections in the private sector. ‘We’re building bridges where there aren’t any,’ said Scott Brouillette, InReturn’s chief executive. ‘How are you going to hire someone you don’t understand and have no relationships with?’”

  • “Less than 20 percent of people with disabilities held a job in 2019, according to the Bureau of Labor Statistics.”

  • “A 2018 report from Accenture, which analyzed the disability protocols and financial performance of 140 companies, found that firms with the best practices saw 28 percent higher revenue, double the net income and 30 percent higher profit margins, on average, over a four-year period.” READ MORE


Can manufacturing production be brought back to the U.S.? “The experience of one of the last domestic producers of the N95 mask, Prestige Manufacturing, is emblematic. During the swine flu pandemic in 2009, the company geared up production and hired more workers, only to see hospitals shift back to foreign producers once the crisis was over. ‘Hospitals didn’t stick with us; we had to lay off 150 employees,’ Mike Bowen, the president of Prestige, told us. After Covid-19 hit, the company made additional masks only for hospitals willing to sign contracts guaranteeing they would stick with the manufacturer for the long term. As a result, there was a six-month delay in scaling up production, and its output was significantly smaller than what Prestige might have produced had there been more certainty about the stability of future demand.”

  • “If products are going to be successfully manufactured in the United States, there must be sustained purchases by the government at the federal, state, and local levels, certainly for medical supplies but also in other industries.”

  • “After all, taxpayer money should not be used to subsidize foreign production.” READ MORE