Gusto, a provider of payroll, human resources, benefits, and insurance services to small businesses, has partnered with accountants to help them secure loans for their clients under the Personal Protection Program. payroll to the Small Business Administration so they can weather the economic crisis caused by COVID. -19 pandemic.
The company has added more than 40 features since the inception of the CARES Act Payroll Protection Program in response to the pandemic to help small businesses and accountants keep track of PPP applications. These include a PPP application report that has been downloaded over 80,000 times, as well as a PPP loan remittance tracker that clients use to track the estimated $ 1.5 billion in PPP loans. approved products facilitated.
“This is a major crisis,” said Gusto co-founder Tomer London. “It’s a major health crisis, but it’s also a crisis for small businesses. We see that our job is to be there, to help them and to defend them. Not only helping them through the software we develop and the services we provide, but also being there and advocating and being there with the regulators to find out how we can have the best impact possible to help small. companies to survive.
Gusto was launched in 2012 as ZenPayroll and has focused this year on helping customers cope with the pandemic, especially after the CARES Act was approved just over two months ago. An optional Social Security Tax Deferral feature takes advantage of another provision in the CARES Act to allow customers to defer the employer portion of their Social Security taxes for the remainder of 2020 for reimbursement in 2021 and 2022.
“When it comes to responding to the crisis, we have really changed our priorities and we are dedicating our business to focusing on one thing, which is being there for these small businesses and their accountants during this difficult time,” said London. “I work closely with our engineering team, and the vast majority of the engineering team is now focused on this COVID response.”
Gusto recently launched Gusto Pro, a product specifically for accountants, and is part of an AICPA-led coalition that supports fast-start financing for small businesses.
Will Lopez, head of Gusto’s accounting community, works with accountants who help their clients get much-needed loans. “From an accountant’s perspective, you realize that small businesses don’t have a lot of money,” he said. “I think two is the average number of months a small business has to absorb to absorb any kind of business impact, so when the economy shuts down for at least two months, which has happened, it puts pressure huge on that. small business owner to act quickly and try to overcome the existential threat of closure. “
He has seen small and medium-sized businesses working closely with accounting professionals to endure the pandemic. “There are statistics that indicate that the survival rate of small businesses is 40% higher when working with and ending up in front of an accounting professional,” Lopez said. “What we’re seeing in our partner community is that accountants are deploying their expertise far beyond accounting and taxes, while working quickly and efficiently to help their clients get the financing they need,” whether it is federal funding, public funding or private resources. So accountants step into their role as natural advisers during COVID-19, which is pretty amazing to watch. “
Mike Jesowshek, a CPA from Wisconsin who operates a virtual company called Jetrotax with accountants in his state and other states, used Gusto to help get PPP loans for 55% of his small business clients. Most of his clients are lawyers, fitness studios or professional service firms. The PPP had a tough roll-out when it launched on April 3 with $ 349 billion in funding aimed at helping small businesses keep their doors open and retain employees. Many small businesses struggled to access or apply for loans, and funding quickly ran out as large businesses were successful in securing the loans with the help of their banks. Congress provided an additional $ 320 billion and the program resumed on April 27. However, the rules and criteria for eligibility and forgiveness continued to change, prompting many companies to take a wait-and-see stance.
“In general, the paycheck protection program is just a crazy circle,” Jesowshek said. “We got some initial advice when it was released in early April, and since then things have been constantly changing. Get the information out, educate customers, then say, “Oh, I have to back off. Something has changed on some information. More details have been provided. Our clients in the beginning really struggled to get the PPP financing. It wasn’t until this second round of funding came that most of our clients started getting funded. We have had a handful of clients who have been approved in this first line of funding, but most have not. At this point, most of our clients have secured financing if they applied for it and had no problem. Now that things are starting to slow down, it seems there is a lot more availability to work with banks. The banks aren’t that late as far as it goes. It’s been quite a whirlwind just with the constantly changing articles. “
Many small businesses remain concerned about the requirements to get loans canceled, and the House passed a law last week to make terms more flexible (see the story). The Senate passed the bill Wednesday night and sent it to President Trump for his signature (see the story).
In addition to joining the AICPA coalition, Gusto recently partnered with Opportunity Fund, a nonprofit microfinance organization, and the Community Reinvestment Fund USA, a nonprofit organization that helps people living in economically disadvantaged communities. . It has also partnered with Cross River Bank and online lenders Fundera and Lendio to streamline the lending process.
The funding came just in time for a small business. Christine Schmidt, owner of the Yellow Owl Workshop in San Francisco, was able to obtain a PPP loan through Cross River Bank. “I logged into my bank account to pay the bills, and there was all that money in there,” she said. “We cried and jumped up and down immediately. Honestly, we were hours away from laying off all of our staff. The PPP loan funding cleared up that thick and anxious fog. I am thankful that my biggest difficulty now is to moving from work to school at my eight-year-old’s home. Second-graders and basic math don’t respect my creative process. “