Banks Are Sitting on a Pile of Cash

Today’s Highlights: A column for business owners who aren’t numbers people. A Texas fast-food chain adopts a $15 minimum. And new tech offerings for hybrid offices.


American banks have been sitting on a pile of cash: “In the coming months, banks are expected to free up tens of billions of dollars in reserves they set aside to cover soured loans—losses that still haven’t materialized a year into a pandemic that shut down swaths of the U.S. economy. In 2020, banks rushed to build up their stockpiles to cover losses on the assumption that consumers and businesses would default on their loans after government stimulus ran out. U.S. banks had $236.6 billion in total reserves in December, according to the Federal Deposit Insurance Corp., nearly double their level from before the coronavirus upended the economy and sent unemployment up sharply.”

  • “Bank executives aren’t so worried anymore. The economy has outperformed banks’ internal forecasts.” READ MORE

Ami Kassar has some advice if your PPP application seems stuck: “If you have started a PPP application with a lender, and feel like it’s taking too long, you need to push hard to determine where you are in the process. If the lender has already submitted your application to the SBA, you are essentially stuck on the path you have chosen. You need to advocate and push hard with your lender to get your loan wrapped up – trying to understand exactly where the delay is. If your lender has not submitted to the SBA, you can stop your application with them and start with another lender. “

  • “But remember that the grass is not always greener on the other side. Do your homework carefully on your new prospective lender.”

  • “Find out the cause of your current hold-up and interview them about if they are having similar issues with other borrowers.” READ MORE

Is your bank your friend or your enemy? Tomorrow at 3 ET, 21 Hats will host a webinar conversation on what business owners should expect from their banks and how they can better manage that relationship. The conversation will feature Ami Kassar, founder of small business loan broker Multifunding; Chris Myers, CEO of Colorado Lending Source; and Violet Alexandre, CRO of Bryllyant, a fintech company building the business bank of the future. Bring your own questions!

Register Here

Steve Wilkinson is building a business—and writing a column for 21 Hats—around helping business owners find confidence in engaging with financial numbers: “The phrase I hear most often from business owners when the subject turns—as it usually does when they are talking to me— to the financial aspects of their business is, ‘I’m not really a numbers person,’ further qualified with a phrase like, ‘I’m more a people person.’ I find this fascinating. … It is common knowledge that many entrepreneurs take an antipathy to numbers into adult life and into their businesses, often with disastrous results. Marco Janezcek of StartUp Nation writes, ‘While an entrepreneur might have an idea that is truly revolutionary, they also need to have an acute awareness of one simple truth: when it comes to business, it’s numbers that matter most.’” READ MORE


Tech tools are adapting for hybrid work: “Executives who work on collaboration platforms at Microsoft, Google, Slack and Zoom said a key need was for employees at home and at work to feel like they’re on a level playing field when on calls and working together. Here are initiatives they’ve launched:”

  • Microsoft Teams: A system called Teams Rooms links conference rooms with remote users who want to join in. Voice recognition in new compatible speakers can identify who in a room is talking, and the person’s name will appear on screen.”

  • “Google Workspace: Google also powers speakers and cameras for the office, but as people leave the house, they’ll be using their phones more for video calling too. An update to the Google Meet phone app will better display people on video.”

  • “Slack: An audio-room feature is coming, so users can quickly hop on a conference call. Think Clubhouse but for quick meetings. The company, which Salesforce agreed to buy, is also adding a feature for sharing prerecorded video messages.”

  • “Zoom: The pandemic’s breakout star has its own conference-room service called, say it with me, Zoom Rooms. The company’s Zoom Rooms Controller app for iOS and Android lets people in the conference room control meetings from their phones—no need to touch the grimy shared keyboard or room control panel.” READ MORE



Here’s why businesses are choosing Shopify over Amazon: “Shopify has expanded its offerings to include warehousing, fulfillment and small business loans. Over the most recent Black Friday shopping weekend, the total sales of Shopify’s merchants eclipsed the total sales of all third-party sellers on Amazon’s marketplace. One seller using Shopify’s software is Eunice Byun, co-founder and chief executive of Material, a New York-based seller of its own signature high-end but affordable kitchenware. Material has never sold its goods on Amazon, and has no plans to, says Ms. Byun, whose full-time staff consists of just three people besides herself.”

  • “For sellers, being on Amazon means giving up vital customer data like email addresses, and ceding control over returns and complaints to Amazon, both nonstarters for Material. ‘The whole of the customer experience is so important to us as a company,’ says Ms. Byun.”

  • ‘Shopify charges each of its customers a flat monthly fee of between $30 and $2,000, depending on features, and an additional 0.5 percent to 2 percent of each transaction if they use a payments processor other than Shopify’s own.”

  • “Neil Bruce is head of online for Toolstop, the online storefront for a 56-year-old, family-run hardware store and wholesaler based in Glasgow, Scotland. For every sale his company makes on Amazon, he pays fees that average 14 percent of an item’s price, he says.” READ MORE


P. Terry’s, a growing hamburger chain in Texas, has raised its minimum wage to $15 an hour: “The pandemic did more than postpone P. Terry’s expansion plans. The Terrys had to permanently close their downtown Austin dine-in location, and they temporarily shuttered all of their dining rooms for almost a year (most reopened last month). They also had to rethink what it means to care for their employees. Since the start, the Terrys have made rituals out of employee birthday cakes (Kathy baked them herself the first nine years), and they offered a free meal with each shift worked, holiday bonuses, and interest-free loans to their workers.”

  • “Most significantly, starting in February, the company raised its minimum wage to $15 an hour. The pay increase stands out in a state where the average wage for fast-food workers is $10.24 to $10.53 an hour, according to the U.S Bureau of Labor Statistics.”

  • “Patrick Terry says that he’s not out to get competing restaurants to raise their wages to match P. Terry’s, but he thinks it’s possible others could follow suit.”

  • “‘I certainly don’t tell other people how to run their business, but I will say that if we can climb this hill, there are plenty of others who can too.’” READ MORE

Tesla recorded hundreds of Covid cases after Elon Musk’s defiant reopening: “The document, obtained by the website PlainSite following a court ruling this year, showed Tesla received around 10 reports of covid-19 in May when the plant reopened, and saw a steady rise in cases all the way up to 125 in December, as the disease caused by the novel coronavirus peaked around the country. The revelation follows The Washington Post’s reporting in June that there had been multiple covid-19 cases reported at Tesla’s facilities in Fremont, Calif., after Musk decided to reopen despite a countywide stay-at-home order, daring officials to arrest him.”

  • “The data, covering the months between May and December, showed there were around 450 total reported cases. Roughly 10,000 people work at the plant.” READ MORE


The pandemic has revolutionized vending machines: “Carla Balakgie, chief executive of the National Automatic Merchandising Association, the trade group representing the vending machine industry, said coronavirus pandemic fears and social distancing have accelerated vending machine adoption. ‘It’s touchless, it’s considered safe and it’s prepackaged so products haven’t been fondled and breathed on,’  she said. ‘And technology has made it even safer: Some machines have a hover feature so you don’t have to touch the buttons and you can use an app on your phone or use mobile ordering.’

  • “Deglin Kenealy, chief executive of gourmet pizza vending machine start-up Basil Street, has seen both additional challenges and successes due to the pandemic.”

  • “Dan Mesches, chief executive of Sprinkles Cupcakes, a chain of 21upscale sweets shops, says their ‘cupcake ATMs’ have seen a 100 percent increase in salessince last March.”

  • “Joshua Applestone, whose company, Fleisher’s Meats, in New York’s Hudson Valley was at the vanguard of artisanal butchery about a decade ago, began selling locally sourced and sustainably raised meats vacuum-packed and dispensed by vending machines in 2015. Applestone Meat Co. now has three locations.” READ MORE


Small grocers are still out of toilet paper: “Small grocers say there's a reason their shelves are still relatively bare. Major suppliers of consumer products, faced with limited supply and high demand, are prioritizing their biggest retail customers like Walmart and Amazon, according to the trade group representing independent grocery stores in the United States. Without access to key products, small grocers say, they're losing out on customers and facing yet another hurdle as they try to survive against big chains. It's not an entirely new problem.”

  • “Before the pandemic, independent grocers were often told they could not get products or particular items available at big chains, according to Christopher Jones, senior vice president of government relations and counsel at the National Grocers Association.”

  • “‘What's happened during the Covid pandemic is really this issue has been magnified,’ Jones said.” READ MORE


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Episode 52: I Need a Vacation: It was this week a year ago that the W.H.O. declared a pandemic, the NBA suspended its season, and toilet paper started to disappear. It has all taken a toll. “This is where it gets tricky,” Jay Goltz tells us. “Just because everybody shows up every day and looks like they're happy-go-lucky, they're not. People have stresses in their life, whether it's their kids, whether it's their aging parents, whether it's their financial situation, whether it's their physical well-being—any of the above. This is just layered on top of whatever was going on in their life before.” Plus: Karen Clark Cole’s company goes to Mars, Dana White gets a smart question about expansion from a retailer in Canada, and Jay discovers that ESOP companies don’t have to pay federal income tax.