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| What Are Fintechs and How Can They Help Small Business? | What Are Fintechs and How Can They Help Small Business? |
| (about 9 hours later) | |
| This article is part of our continuing Fast Forward series, which examines technological, economic, social and cultural shifts that happen as businesses evolve. | This article is part of our continuing Fast Forward series, which examines technological, economic, social and cultural shifts that happen as businesses evolve. |
| Dominick Pietrzak, who owns a film-production company in Brooklyn, was among the small business owners to receive a coveted and potentially forgivable loan in the first round of the Paycheck Protection Program. How he did it was, in retrospect, the result of a convergence of very unlikely events. | Dominick Pietrzak, who owns a film-production company in Brooklyn, was among the small business owners to receive a coveted and potentially forgivable loan in the first round of the Paycheck Protection Program. How he did it was, in retrospect, the result of a convergence of very unlikely events. |
| As a business with just one full-time employee — himself — he first applied for the New York City Employee Retention Grant Program while he was watching Mayor Bill de Blasio talk about the program on television. Three days after seeing the announcement on TV and applying, a few thousand dollars was in his bank account. | As a business with just one full-time employee — himself — he first applied for the New York City Employee Retention Grant Program while he was watching Mayor Bill de Blasio talk about the program on television. Three days after seeing the announcement on TV and applying, a few thousand dollars was in his bank account. |
| For the Small Business Administration’s P.P.P. loan, the most coveted of the early relief efforts, he first tried to apply through his bank, Capital One, but they were not taking applications. That bank, in fact, did not get its system running until the program’s first round was out of money. | For the Small Business Administration’s P.P.P. loan, the most coveted of the early relief efforts, he first tried to apply through his bank, Capital One, but they were not taking applications. That bank, in fact, did not get its system running until the program’s first round was out of money. |
| But that turned out to be a stroke of luck for Mr. Pietrzak. Searching for a way to keep his small business afloat, he took a chance and answered an offer from his bookkeeping company, Bench, an eight-year-old financial technology start-up. | But that turned out to be a stroke of luck for Mr. Pietrzak. Searching for a way to keep his small business afloat, he took a chance and answered an offer from his bookkeeping company, Bench, an eight-year-old financial technology start-up. |
| Bench, he said, connected him to Fundera, a seven-year-old lending platform for small companies. On a Sunday he signed closing documents from Cross River Bank in New Jersey — which he had never heard of — and two days later found the P.P.P. money in his bank account. | Bench, he said, connected him to Fundera, a seven-year-old lending platform for small companies. On a Sunday he signed closing documents from Cross River Bank in New Jersey — which he had never heard of — and two days later found the P.P.P. money in his bank account. |
| “I was a little skeptical with Fundera and Cross River Bank, but I just kept trying and redoing the application and eventually it went through,” Mr. Pietrzak said. “There were some hiccups with the site, but after I did the application a few times, it went through.” | “I was a little skeptical with Fundera and Cross River Bank, but I just kept trying and redoing the application and eventually it went through,” Mr. Pietrzak said. “There were some hiccups with the site, but after I did the application a few times, it went through.” |
| In the end, hiccups included, he received the kind of service and financial support in the early days of the program — from two little known fintech entities and a little-known bank founded in 2008 — that many small business owners with well-established traditional banking relationships did not get. | In the end, hiccups included, he received the kind of service and financial support in the early days of the program — from two little known fintech entities and a little-known bank founded in 2008 — that many small business owners with well-established traditional banking relationships did not get. |
| “Prior to this crisis you had fintechs specializing in the under-$50,000 loans,” said John Pitts, the head of policy for Plaid, a fintech company that serves as a link between fintech apps and some 11,000 financial institutions, and a former deputy assistant director of intergovernmental affairs at the Consumer Financial Protection Bureau. “It’s not surprising you don’t see this cohort well served” by the big banks. | “Prior to this crisis you had fintechs specializing in the under-$50,000 loans,” said John Pitts, the head of policy for Plaid, a fintech company that serves as a link between fintech apps and some 11,000 financial institutions, and a former deputy assistant director of intergovernmental affairs at the Consumer Financial Protection Bureau. “It’s not surprising you don’t see this cohort well served” by the big banks. |
| One thing the pandemic has revealed is that fintechs, largely online financial service companies once reserved for younger people with lower earnings and savings, have proven to be savvy and effective intermediaries in the age of the coronavirus. | One thing the pandemic has revealed is that fintechs, largely online financial service companies once reserved for younger people with lower earnings and savings, have proven to be savvy and effective intermediaries in the age of the coronavirus. |
| When it came to offering the crucial financial support small business owners were seeking in the pandemic, some of these fintechs held their own or bested more established financial service firms that struggled to roll out promised programs. Through their technology, these companies can meet their clients’ financial needs online — the 21st century equivalent of the relationships brick and mortar banks once promoted. | When it came to offering the crucial financial support small business owners were seeking in the pandemic, some of these fintechs held their own or bested more established financial service firms that struggled to roll out promised programs. Through their technology, these companies can meet their clients’ financial needs online — the 21st century equivalent of the relationships brick and mortar banks once promoted. |
| “We sit on top of a network of 100 banks,” said Everett Cook, chief executive and co-founder of Rho Business Banking. “It gave us a fair perspective of what was going well and what was going poorly.” | “We sit on top of a network of 100 banks,” said Everett Cook, chief executive and co-founder of Rho Business Banking. “It gave us a fair perspective of what was going well and what was going poorly.” |
| Mr. Cook said Rho looked to give customers access to loans at any institution that had money available, providing more flexibility than business owners who went to a single bank found. “We saw lots of customers come to us because they were in the queue of a top-five bank,” he said. “The large banks prioritized the businesses they knew. That created a flood of applications for everyone who didn’t fall into that box.” | Mr. Cook said Rho looked to give customers access to loans at any institution that had money available, providing more flexibility than business owners who went to a single bank found. “We saw lots of customers come to us because they were in the queue of a top-five bank,” he said. “The large banks prioritized the businesses they knew. That created a flood of applications for everyone who didn’t fall into that box.” |
| Many fintechs found that the demand for their services, which had been steady before the crisis, grew almost exponentially as companies shifted employees to working from home. Rippling, a San Francisco-based fintech that provides support for payroll and benefits and manages computers and access to company databases and software, began attracting customers who had been resistant to change their processes but who now had fewer options. | Many fintechs found that the demand for their services, which had been steady before the crisis, grew almost exponentially as companies shifted employees to working from home. Rippling, a San Francisco-based fintech that provides support for payroll and benefits and manages computers and access to company databases and software, began attracting customers who had been resistant to change their processes but who now had fewer options. |
| Updated June 24, 2020 | |
| Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. | |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| “Any exogenous shock to the system favors companies that can move quickly and take advantage of those things,” said Parker Conrad, Rippling’s co-founder and chief executive. “All the reticence about doing things online evaporated in an instant. That’s a dynamic that impacts not just fintechs but technology companies more broadly who are trying to automate business processes that are offline.” | “Any exogenous shock to the system favors companies that can move quickly and take advantage of those things,” said Parker Conrad, Rippling’s co-founder and chief executive. “All the reticence about doing things online evaporated in an instant. That’s a dynamic that impacts not just fintechs but technology companies more broadly who are trying to automate business processes that are offline.” |
| In May, Mr. Conrad said new sales were up 65 percent so far this year. | In May, Mr. Conrad said new sales were up 65 percent so far this year. |
| New technology companies were also able to take data they could aggregate quickly — in this case information needed for the loan applications — and deliver it electronically and quickly to local credit unions. The credit unions, in turn, could help their customers. | New technology companies were also able to take data they could aggregate quickly — in this case information needed for the loan applications — and deliver it electronically and quickly to local credit unions. The credit unions, in turn, could help their customers. |
| Cortney Keene, co-founder of Keene Perspectives, an educational company in White River Junction, Vt., that works with autistic children, needed a loan to help support her 20 employees. Her business shut down when the stay-at-home orders were issued, and she laid off 17 workers. | Cortney Keene, co-founder of Keene Perspectives, an educational company in White River Junction, Vt., that works with autistic children, needed a loan to help support her 20 employees. Her business shut down when the stay-at-home orders were issued, and she laid off 17 workers. |
| She used Gusto, a fintech payroll company, to organize the data for her loan applications as soon as early guidance on the payroll loans came out. She then got funding through a local credit union in Vermont. “We’d be seriously cutting services without the P.P.P. loan,” she said. | She used Gusto, a fintech payroll company, to organize the data for her loan applications as soon as early guidance on the payroll loans came out. She then got funding through a local credit union in Vermont. “We’d be seriously cutting services without the P.P.P. loan,” she said. |
| Edward Kim, co-founder and chief technology officer of Gusto, which is eight years old, described what his company did in the early days of the crisis as “getting all the gnarly parts into one document to get this loan approved as quickly as possible so someone at a bank isn’t scrutinizing it.” | Edward Kim, co-founder and chief technology officer of Gusto, which is eight years old, described what his company did in the early days of the crisis as “getting all the gnarly parts into one document to get this loan approved as quickly as possible so someone at a bank isn’t scrutinizing it.” |
| While more established payroll companies aimed to do the same thing, Gusto’s low-cost online model meant it had more small businesses as clients — with average monthly payrolls from $20,000 to $28,000. Given the early confusion around how the Small Business Administration would work with financial institutions, Gusto focused on streamlining the process of collecting the needed information so banks could disburse the money. | While more established payroll companies aimed to do the same thing, Gusto’s low-cost online model meant it had more small businesses as clients — with average monthly payrolls from $20,000 to $28,000. Given the early confusion around how the Small Business Administration would work with financial institutions, Gusto focused on streamlining the process of collecting the needed information so banks could disburse the money. |
| What all these companies are counting on is that businesses, forced to do things differently in the crisis, will continue to use fintechs for more of their needs. | What all these companies are counting on is that businesses, forced to do things differently in the crisis, will continue to use fintechs for more of their needs. |
| “Things were already moving in this direction,” Mr. Conrad said. “What would have been holding people back was the inertia. Once people move, the inertia works in the other direction. Who wants to go back to filling out insurance paperwork with a pen and trying to find a fax machine? No one.” | “Things were already moving in this direction,” Mr. Conrad said. “What would have been holding people back was the inertia. Once people move, the inertia works in the other direction. Who wants to go back to filling out insurance paperwork with a pen and trying to find a fax machine? No one.” |