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Sean Murray: Okay, hello,
everybody, I'm back here. My

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name is Sean Murray with
deBanked News and today I have

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Jared Weitz, who is the CEO of
United Capital Source. Thank you

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for being here Jared.

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Jared Weitz: Thanks for having
me, Sean.

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Sean Murray: No problem. So I
want to get right to it. You've

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spoken at several of our events
before, and you've even graced

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the cover of our magazine, as
you might see in the background.

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And for those who don't know
you, could you give us a little

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bit of a brief background of
yourself and your work in the

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industry?

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Jared Weitz: Yeah, absolutely.
I've been involved in the MCA

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and alternative lending space
since 2006, at positions and

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underwriting and business
development. But most notably,

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the start of United capital
source in 2011, is I think,

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where I've made the most history
in the space. We operate a very

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small sales team of 10 to 12
people, I've never really had

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more than that at any one time.
However, we've always been able

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to hit fairly large numbers
through really good marketing

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and technology. And I think,
aside from really being a

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broker, we're most notably a
marketing company that happens

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to be able to broker these deals
as well. We've so far done close

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to a billion dollars in
brokerage.

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Sean Murray: Wow. Okay. So as a
broker, this is my first

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question to you. Um, it sounds
like you work with merchants

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directly. Right? So you're on
the front lines of it all. And

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I'm curious, have you seen any
changes in in borrower behavior

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and merchant behavior? This is
obviously an interesting year.

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And have you noticed the, the
way that they operate or act?

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Has it changed at all?

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Jared Weitz: You know, I think
that there's been a heavy amount

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of caution in the very beginning
of the COVID months of March,

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April and May, we've seen that
continued caution through June.

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And it started to lighten up a
little bit in July, where

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businesses were really
understanding and getting used

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to what their actual revenues
were looking like for the year,

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there was hyper caution from
business owners with just not

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understanding what their revenue
would look like. And it's really

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difficult to make a decision on
what type of financing to take

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when you don't know that. And so
in the beginning months, we were

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really just focused on PPP and
EIDL loans. We had our whole

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sales team really just focused
on holding down our existing

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book of business, and then we
automated our PPP side. So we

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processed about 3,500 PPP loans.
The average loan was about

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$67,000. And we did that through
our fintech partners, kabbage,

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veem, and bluevine. We're really
thankful for those

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relationships, we worked
directly with the SBA on the

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EIDL side, we've probably done
about 100 or 150 of those now,

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they've been really helpful to
the clients that we've been able

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to connect them with. And we've
also been able to use that as an

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acquisition tool to just further
chat with them about what their

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further needs might be. Because
there's been more caution on the

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business owner side, what we've
seen is business owners taking a

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little bit less than they
qualify for, and really, really

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making sure that they're putting
the funding to good use. Not

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that they weren't before, but
because revenue was so

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predictable before, someone
could say, Hey, I can take an

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extra 10. And I can do this or
this with it. Now what we're

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seeing is someone that's
approved for 50, taking 20 right

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now, really having that need for
it, and then coming back and and

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you know, pulling the rest of it
in this example, it would be

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like a line of credit that we're
connecting them with. So we're

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really just seeing some cautious
behavior. But I think that's, I

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think it's a good sign for the
lenders, because I think that it

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means that the business owner
will really, really focus on

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what that payback looks like.

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Sean Murray: So you know, I'm
curious about your experience

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with PPP, you say that you
automated it, but I imagine you

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must have had customers call you
to talk to someone about it.

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Jared Weitz: Yeah.

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Sean Murray: has that
happened, right?

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Jared Weitz: So yeah, we had all
of our new sales reps, fielding

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those customer service calls in
between, you know, working

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whatever funding they had, as
well as their just customer book

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of business. And, and we had to
do some quick tutorials and in

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around what the program looks
like, and continue those on in

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early morning sales calls, as
they were different program

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guidelines changing. So we had
an 8:30am call and then we had a

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12pm call twice a day while
everyone was working at home.

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And it was just a recalibration
of just what the day is looking

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like what the questions are
looking like and if there are

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any new PPP rules or EIDL rules
that we should be letting our

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customer base know or that we
can be letting them take

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advantage of.

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Sean Murray: Okay, and how do
these customers, how did these

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merchants, how did they seem
when it came to PPP, were they

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confused? where they...

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Jared Weitz: A lot of clients
were confused at first because

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it was just this new program and
their depository bank was either

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not offering it or just not
taking any calls about it. So

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there was real confusion and a
lot of panic. We spoke to a lot

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of people that were super
thankful to be able to just put

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the application in through us
see what their approval amount

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looks like. I mean fintech
really rang true here into what

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we do, it was super beneficial
to hear these merchants like oh,

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my God, I've been with, you
know, my depository bank for 10

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years, I can't even get my
banker on the phone. And you

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guys connected me with this guy.
I saw my approval amount, I

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uploaded my documents, it was
super easy. So it was it was

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rewarding, during a really
choppy time to be able to help

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people that way. And I think
it's also what our employees and

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staff needed to feel during that
time as well, because everything

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is so up and down. And they were
really getting to feel that

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satisfaction from helping people
every day. So it was important

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for me to not furlough anyone,
and to keep everyone working and

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keep everyone sane while they
were home.

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Sean Murray: Right. Wow. So you
know, there's going to be post

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PPP world. They're talking
about, I mean, it's ended

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currently, but they're talking
about potentially extending it.

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And so that obviously bring this
back to the regular world of

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financial options outside of
whatever the government can come

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up with. And so I'm curious,
since you work, not only with

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merchants, customers, borrowers,
you work with lender and funder

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partners, kind of what you're
seeing from that. Have you seen

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any? I'm sure you've seen some
changes, but have you seen some

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not come back? Have you seen
some kind of operate at a at a

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lower capacity than than before?
And are there some that have

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returned to somewhat normal?
Like what what is the funding

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capacity outside of government
looking like right now,

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Jared Weitz: if I were breaking
it up in a pie, I would say that

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about 25% of the relationships
that we've had before COVID are

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not funding anymore. They've
just taken a path where they're

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not doing that. I'd say another
65% are back to funding. And

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they're doing so cautiously.
They're changing their

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guidelines. You know, let's say
they started funding in June,

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and they've changed their
guidelines to loosen up each

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month since that opening,
however, they all started, you

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know, very cautiously, which
which is understandable. Um, and

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then I think there's about, call
it 10%, or, you know, left that

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are really almost operating at
full capacity, from what I see,

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you know, their offers haven't
changed, the pricing hasn't

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changed the underwriting speed
hasn't. Those guys all happen to

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have private lines. I will say
that and I think, you know,

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having a private line or a
private lender, albeit a little

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more expensive during this time
could have been beneficial. Some

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of the guys that securitized
weren't having the easiest time

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getting started again, the 65%
of the lenders that are

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operating cautiously, but still
funding, they've all shrunken

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their teams. And that makes
sense in this environment as

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well. I think some people have
even gotten rid of a lot of

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inside sales teams and really
focused on operations and

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underwriting. We've heard a lot
of them are thriving from a work

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from home environment, which is
really good to hear, you know,

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we want to hear that everyone's
operational. I always tell my

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team, you know, we never want to
be the last one standing in the

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space, right? Like, that just
means it's us. So we want there

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to be everyone around and
operating. And so it's good to

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see more and more of that.

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Sean Murray: Have you noticed
I'm interested in a second group

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that is not operating back to
full capacity? Have they been

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more selective with who they
work with? Because they might be

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working with you? Right, but
United Capital Source has been

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around for a long time. You
know, they know of you. But

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let's say you're a smaller,
lesser known company, or perhaps

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not operating within a specific,
you know, realm of ethics and

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guidelines. Is it harder for
others to sign up with these

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lenders and funders? Are they
being more selective out there?

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Jared Weitz: Yeah, absolutely.
Each one of the lenders in that

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second group that I mentioned,
when they restarted their

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systems, they had reached out to
me and said, you know, we're

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only starting with a handful of
ISOs right now, we want to

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really make sure that the money
that we're putting out, keep in

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mind, this is probably a lot of
equity money now that's being

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you know, put back into a
company to be able to re-lend,

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so we want to make sure that the
equity money we're putting in

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is, is really being handled with
kid gloves. And it's what you're

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mentioning, you know, they're
reaching out to the brokers that

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have been around a long time and
have a good reputation. I'm

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super thankful to be one of
those guys. And to get those

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phone calls, it was really
beneficial for the group to, you

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know, each week say, hey, this
guy's back, and this guy's back

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up. And, you know, it continues
to lift spirits as well. And I

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think that you need to keep the
spirits high during, you know,

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an uncertain time.

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Sean Murray: Yeah, that's
understandable. So my last

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question to you is, what's going
to change permanently? If

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anything, and you're in sort of,
in your own thoughts and ideas?

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And what's your prediction for
what's going to happen next? A

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lot, where are we going from
here?

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Jared Weitz: So I think that,
um, I think there's going to be

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a sector of businesses that will
continue to do well during this

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time, you know, transportation,
and e-commerce, any kind of

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delivery routes, medical, you
know, all of these things have

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been able to withstand this time
and actually be an essential

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business. So I think more
essential businesses will

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continue to grow and learn to
operate, and they'll continue to

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hire, and they'll continue to
need money. And so those are

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folks that you can all help in
service, I think there's going

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to be up to two out of four
restaurants, maybe that don't

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make it unfortunately, I think
that's an industry that's going

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to go through a little bit of a
tougher rebuild. The guys that

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are going to make it maybe more
QSRs (quick service restaurants)

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that have delivery, they don't
have such a high rent, their

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food cost and their staff cost
is super fixed. And they really

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make their money on outbound
deliveries. And so I think that

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lenders will continue to follow
these trends with businesses.

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And it will allow them to come
up with aggressive programs for

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businesses that are flourishing,
it'll allow them to come up with

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some shorter term programs for
the businesses that may be

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facing challenges in the future.
And I think that it will

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continue this way into 2021 as
well, unfortunately, we have an

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election coming up. We have no
vaccine yet. Even the first year

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of vaccine could be pretty
wonky. So I think people should

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really buckle up. We've told our
team like, hey, this is like

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boots on the ground for the next
year plus right now. And and I

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think that's what it's going to
look like until possibly toward

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the end of 2021, where there's a
bit more of an understanding the

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things from the election have
possibly settled. And then maybe

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a restart of how the economy is
going to look thereafter.

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Sean Murray: Yeah. It just made
me think you mentioned that two

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out of four restaurants may not
make it do you think that some

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have held on longer than they
normally would have? Because it

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had the opportunity if you're in
the northern part of the country

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to do outdoor dining. And now,
now it's September, right. So

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it's starting to cool off and
there will still be some outdoor

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dining, and states like New York
trying to relieve some of those

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restrictions. But once we get to
November, December, you know,

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outdoor dining is is gone. So do
you think that we could see a

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00:13:14.460 --> 00:13:17.700
further drop off kind of as the
year goes off, in the

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restaurants?

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Jared Weitz: You know, they
actually estimate that one in

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every four restaurants is going
to drop off. I'm saying it's

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going to be two. So I'm actually
going higher based upon what

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you're just mentioning. And I
would also just dovetail into

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saying, landlords have given six
to eight month reprieves to a

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lot of restaurants during this
time, and that term is going to

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00:13:42.420 --> 00:13:46.080
end soon. So you're going to go
back to having to pay whatever

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rent while you're at 25 to 35%
capacity and serving, and it's

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going to be a little more
difficult for fine dining or,

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you know, catering halls or
bigger, you know, places like

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that to have a larger staff or
to have a higher rent.

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Sean Murray: I appreciate that
very much . Everybody that was

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Jared Weitz with United Capital
Source. Thank you, Jared.

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Jared Weitz: Thanks, Sean.