The Short-Term Lenders Are Back

Most disappeared after Covid hit, but online lenders that offer easy access to sometimes deceptively priced loans are returning.

Good morning! .

Here are today’s highlights:

  • Where did all the restaurant workers go? Try the dispensary.

  • One of Silicon Valley’s favorite tax breaks is being targeted.

  • Cliff Freeman was the ad man who asked, “Where’s the beef?”


Steve Silberberg gave up computer programming to start a business guiding backpackers: “He gets paid to take hikers of all fitness levels on one- to two-week trips in some of the most stunning landscapes of the U.S. national parks through his Hull, Massachusetts-based business, Fitpacking. Silberberg, 60, credits his 16-year-old company’s survival to rookie confidence. ‘I thought, Oh yeah, for sure this is going to be a success. Who wouldn’t want to go backpacking all week?’”

  • “‘It took two to three years before any reasonable amount of funds started coming in.’ In the meantime, he took coding jobs in the winter during the off season for hiking in the U.S. ‘The business didn’t stop just because I had a 9-to-5, so it was like working two jobs.’”

  • “Silberberg easily launched a website and built databases. ‘Then came the tricky stuff like marketing and dealing with customers and accounting. While none were completely foreign to me, I noticed that I did not have quite the same acumen.”

  • “‘I used to sit at a desk in front of a computer all day, and now I sit at a desk in front of a computer all day,’ he says with a laugh. ‘But I just got back from two weeks guiding in Yellowstone, and next month I’ll wake up in the bottom of Grand Canyon.’” READ MORE


Ami Kassar says the short-term online lenders that often prey on small businesses are back: “Short-term online lenders (and cash advance companies) who like to entice borrowers with quick funding (in exchange for rapid payback) effectively disappeared into cyberspace when the pandemic started. So let's be clear:  they expected their money back from their borrowers but stopped making new loans. Over the last month, these lenders are rearing their ugly heads again. I regularly get texts and phone calls from lenders offering me ‘rapid funding’ and ‘low rates.’ If a small business owner is in a pinch, these offers can be enticing.”

  • “If you are in a tough spot, my best advice is to slow down and take a breath. There is usually a better way to solve your problem ...” READ MORE

Insider has produced a list of “solo capitalists” who are funding startups: “The solo capitalists are winning over founders in a searing private market, where an abundance of capital has helped these people raise small funds for investing. Their funds aren't especially common, but they're hard to miss. For this list, we researched the solo capitalists beating out larger funds for access to hot funding rounds for startups, and we asked them to nominate others. We defined a solo capitalist as a fund manager who raises outside capital and is the only member of the investment team.”

  • Steve Anderson, Baseline Ventures: “The first investor in Instagram, Anderson had a 12 percent ownership stake in the social photo app when it sold to Facebook for $1 billion. Since then, Anderson has crafted his single-partner fund into one of the most successful investment firms, with more than 50 exits to date. Before Baseline, Anderson was a partner at Kleiner Perkins and a senior director at Microsoft. Founded in 2006, Baseline is a generalist fund. It often backs founders with little more than an idea ...”

  • Cindy Bi, CapitalX: “She founded and sold a company while she was working as a consultant for Accenture. Then Bi convinced her next employer to give her some capital to invest in startups. Now she's running her own rolling-fund firm, CapitalX. Bi's CapitalX has seeded 11 companies that are worth $1 billion or more, and they cover many industries and geographies, including Latin America and India.

  • “‘Going solo allows maximum flexibility to make quick investment decisions,’ Bi said. ‘And founders really appreciate my intros, transparency, and being a cheerleader on their journey.’” READ MORE


Warehouses are desperate for employees heading into the holiday crush: “Warehouse operators are throwing every tool they can at increasingly urgent efforts to hire seasonal workers as they brace for an expected flood of holiday goods amid competition for scarce labor from deep-pocketed rivals. Logistics providers are boosting pay, adding flexibility to shifts, blanketing social media with recruitment ads and even shipping in more robots to help workers field surging e-commerce volumes. They are also jockeying with titans like Amazon, Walmart, and United Parcel Service that are dangling inducements, from signing bonuses to assistance with college tuition ...”

  • “‘When companies are looking ahead to peak season … the word I’m hearing most often is terrified,’ said Dan Johnston, chief executive and co-founder of WorkStep, a startup whose software helps companies hire and retain supply-chain workers.”

  • “Demand for distribution workers has skyrocketed as more consumers shop online, in part because picking, packing and shipping e-commerce orders is more labor-intensive than traditional warehouse operations that distribute wholesale goods or replenish store inventory.”

  • “Starting pay for Amazon warehouse workers is up to $22 an hour in some locations, the company said, while the average hourly wage for supply-chain workers at rival Walmart is now $20.37.” READ MORE

Cargo is piling up in California ports: “Nike doesn’t have enough sneakers to sell for the holidays. Costco is reimposing limits on paper towel purchases. Prices for artificial Christmas trees have jumped 25 percent this season. Despite mounting shipping delays and cargo backlogs, the busiest U.S. port complex shuts its gates for hours on most days and remains closed on Sundays. Meanwhile, major ports in Asia and Europe have operated round-the-clock for years.”

  • “‘With the current work schedule you have two big ports operating at 60 percent-70 percent of their capacity,’ said Uffe Ostergaard, president of the North America region for German box ship operator Hapag-Lloyd. ‘That’s a huge operational disadvantage.’”

  • “Tens of thousands of containers are stuck at the ports of Los Angeles and Long Beach, Calif., the two West Coast gateways that move more than a quarter of all American imports. More than 60 ships are lined up to dock, with waiting times stretching to three weeks.”

  • “Participants in each link in the U.S. chain—shipping lines, port workers, truckers, warehouse operators, railways and retailers—blame others for the imbalances and disagree on whether 24/7 operations will help them catch up. All of them are struggling with a shortage of workers.” READ MORE


Where did all of the retail and restaurant workers go? A lot of them found cannabis: “Jason Zvokel traded in his 15-year career as a Walgreens pharmacist for a different kind of drugstore: a marijuana dispensary. Now instead of administering vaccines and filling prescriptions, he’s helping customers make sense of concentrates, tablets and lozenges. His pay is 5 percent lower, he said, but the hours are more manageable. ‘I am so much happier,’  said Zvokel, 46, who’s worked in retail since he was 18. ‘For the first time in years, I’m not miserable when I come home from work.’”

  • “Marijuana dispensaries and cultivation facilities — deemed ‘essential’ by many states at the beginning of the coronavirus crisis — became an early refuge for retail and restaurant workers who had been furloughed or laid off. The industry has continued to grow, adding nearly 80,000 jobs in 2020, more than double what it did the year before ...”

  • “An estimated 321,000 Americans now work in the industry, a 32 percent increase from last year, the report found, making legal marijuana one of the nation’s fastest-growing sectors. In other words: The United States now has more legal cannabis workers than dentists, paramedics or electrical engineers.” READ MORE

There’s a shortage of school bus drivers: “In Palm Beach, Florida, the district is short 75 drivers on its 700-bus fleet. A major reason is that the district can’t compete with Amazon, which recently opened a 96,000-square-foot warehouse there, and is actively recruiting commercial delivery drivers. The district’s bus drivers start at $14.57/hour; Amazon offers $16.50+. Aaron Dietrich, who works with a union that represents many of Florida’s bus drivers, says the shortage there is quickly becoming an ‘emergency.’”

  • “‘What we are seeing is the result of market pressures, plain and simple,’ he told The Hustle. ‘People are opting for better-paying jobs, and our severely underpaid education sector in Florida is not equipped to compete.’” READ MORE


An obscure tracker of used-car prices is now a leading indicator of inflation: “The Manheim index provides a monthly update on the prices of used cars sold in wholesale auctions. And with the used car market booming partly because of a chip shortage for new vehicles, the index offers crucial information for investors trying to answer an important question: What’s happening with inflation? Over the last year, consumer prices have risen more than 5 percent, the fastest pace in more than a decade.”

  • “In June, prices for used cars and trucks were up 45 percent from a year earlier, according to the Bureau of Labor Statistics, which produces the Consumer Price Index. That pace has slowed somewhat since, but in August used car and truck prices were still up nearly 32 percent from a year earlier.”

  • “Used car prices typically aren’t a big factor in inflation, but the big jump changed that. Analysts knew that if they could somehow predict where used car prices would be in a few months, it would give them a good sense of how high inflation would be.” READ MORE


Yes, it’s true owners can sell their shares virtually tax-free through a 1042 program: Following our recent 21 Hats Conversation about ESOPs (What’s In It for the Owner? A Skeptical Conversation about ESOPs), we’ve received many requests for more information about the tax savings and other benefits that result from installing an ESOP.  If you have questions about how it works, please reach out to Applied Economics, LLC, one of our trusted partners and sponsors. Applied Economics works with established lower-middle market companies to assess the feasibility and appropriateness of an ESOP.  GET RESOURCES AND CONTACT INFO


One of Silicon Valley’s most popular tax breaks is being targeted on Capitol Hill: “Earlier this month, the House Ways and Means Committee approved a tax proposal that would cut in half the amount that investors who invest under the Qualified Small Business Stock (QSBS) tax provision can exclude. While slicing into the QSBS is far from a sure thing, it does seem certain many venture capitalists will sit nervously as they look to see what Washington will do next. ‘There’s still a lot more that needs to come out about this,’ said William Yahara, tax director at EisnerAmper. ‘There is a lot of lobbying going on.’

  • “Under Section 1202 of the IRS Code, early-stage investors who invest in QSBS—which includes tech startups as long as they’re C corporations—since 2010 have been permitted to exclude 100 percent of the capital gains made on those investments, if the stock is held for at least five years and is acquired at issue.”

  • “The exclusion—signed into law under the Clinton administration and expanded under the Obama White House—has a limit of $10 million or 10x the basis of the stock sold, whichever is greater.”

  • “If the 1202 tax break is basically halved, investors would have options for other places to put their capital gains from previous deals that would lessen or defer the increased tax payments.” READ MORE

In New York City a crowd stormed a food court to defy an indoor-dining mandate: “As customers enjoyed their Saturday afternoon at Staten Island Mall and prepared to dig in to their meals, a raucous, maskless crowd of dozens opposing New York City’s indoor vaccination mandate stormed into the food court while chanting, ‘U-S-A!’ Their goal: to eat at the food court without showing proof of vaccination. ‘Everybody go get food and eat. That is what we’re here to do!’ one woman said to the group, according to a video from freelance journalist Oliya Scootercaster. ‘We’re going to meet over there and go into the food court area and sit our butts down and stay as long as we like!’”

  • “Although people are not required to show proof of vaccination or wear masks inside the mall, they do need to show proof of immunization to eat at the food court.”

  • “The scene in Staten Island — a borough largely sympathetic to former president Donald Trump — shed light on some of the opposition to New York City’s mandate that requires proof of at least one dose of a coronavirus vaccine for various indoor activities for workers and customers, including indoor dining and gyms.” READ MORE


Businesses are struggling to keep up with the rollout of 5G technology: “[Melissa] Brinkman is the chief executive of Custom Alarm, a company that installs and monitors home and commercial security systems, fire detectors and personal emergency alert devices in and around Rochester, Minn. Those alarm devices were mostly designed to communicate using slower 3G wireless technology. In early 2019, AT&T announced it would phase out 3G wireless service in February 2022, meaning that the devices would no longer have a connection after that date. Ms. Brinkman’s technicians were replacing the older gear, one location at a time, when the pandemic lockdown began in March 2020. By early this year, Covid-19 concerns had eased and people were more willing to let her workers into their homes.”

  • “But then chip shortages hit the alarm industry, so replacement equipment became harder to come by. ‘Now we’ve got this Delta variant,’ Ms. Brinkman said. ‘We’re running into challenges yet again.’”

  • “The Minnesota company’s challenges are shared by many businesses whose products and services depend on wireless technology, from emergency alert pendants and home medical devices to crash-prevention systems in cars and ankle bracelets that monitor felons.”

  • “If they cannot make equipment upgrades before the 3G sunset, some life safety and emergency alert services will stop working.” READ MORE


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  • 933K businesses received funding through Womply

  • 1.3M loans funded

  • $19B deposited

  • $14.4K average loan 

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Cliff Freeman, who asked, “Where’s the beef?” “Cliff Freeman, the award-winning copywriter and creative director behind many witty television commercials, most memorably the one for Wendy’s in which a gravelly voiced old woman shouts, “Where’s the beef?” at the sight of a puny hamburger patty in an oversized bun, died on Sept. 5 at his home in Manhattan. He was 80. The cause was pneumonia, his wife, Susan (Kelner) Freeman, said. In a career of nearly 40 years, Mr. Freeman’s antic sense of humor made brands stand out — first at the advertising agency Dancer Fitzgerald Sample and then, starting in 1987, at his own small agency, Cliff Freeman & Partners.”

  • “‘Almost all our clients are Davids up against Goliaths,’ Mr. Freeman told New York magazine in 1993. ‘We have to win with wit.’” READ MORE


Gene Marks and I are back today with another 21 Hats Dashboard podcast where we highlight the news stories business owners should be thinking about this week. Today, Gene explains why Intuit’s purchase of Mailchimp is going to lead to you stop sending out your boring monthly newsletter. Plus: Are you still screening job candidates for drugs? Couldn’t the public companies that got PPP money have at least paid it back? And how technology is improving performance reviews.