Friday, March 29, 2024
Technology News
Trusted, Accurate, and Validated
Home / Uncategorized  / Smart Moves for Small Business Now: Julio Gonzalez, CEO of Engineered Tax Services

Smart Moves for Small Business Now: Julio Gonzalez, CEO of Engineered Tax Services

Small businesses are struggling in the wake of the coronavirus pandemic, but tax professionals are advising employers to make a few smart moves right now to access the new loan funds and other economic support.  

Julio Gonzalez, CEO of Engineered Tax Services, says there are several essential steps small businesses should take at this time. Gonzalez primarily works with property investment firms to unlock IRS-sanctioned tax benefits and has also advised Fortune 500 companies, including IKEA, McDonald’s, Costco, and Johnson & Johnson.

President Trump on Friday signed into law a new $484 billion coronavirus-relief package that adds funds to two small-business loan programs that were quickly depleted over the past two weeks with a flood of applications. Many employers will be clamoring for assistance from the Paycheck Protection Program (PPP), which provides forgivable low-interest rates loans that could serve as a lifeline for many businesses during the pandemic. 

Gonzalez notes that the good thing about this new influx of cash is that $60 billion will be coming from small banks or credit unions and is designated for self-employed people and small businesses.   

He recommends immediately applying for the SBA 7A loan with the immediate $10,000 cash forgiveness advance. This application is available online and is first come, first served. He notes that this round of stimulus funding may have more funds available for “self-employed and independent contractors and gig workers” who largely got shut out of the last round of loans.

“The issue was that the banks didn’t know how to process those applications,” says Gonzalez of the initial $349 billion PPP funds. “They didn’t have the template for the independent, self-employed and gig workers. It took another 10 days for that process to get worked out and by that time most the money was officially taken. Hopefully, this round will be better for them.”

PPP loan applications become available sometime on Friday.  Gonzalez suggests business owners immediately download the sample application and gather the requested information. 

“You use your tax return and your payroll record to determine what your average monthly income is,” says Gonzalez. 

Next, employers need to make sure their bank is participating in the program as most banks will only take applications from current customers. Gonzalez doesn’t recommend applying at more than one bank because it may cause confusion during the approval process. He suggests employers “go with [their] best relationships.”

“Where is the best access to the money? My clients that had very strong relationships with the executive level people at their banks were successful,” Gonzalez observes about the last round of stimulus funding. “The smaller businesses that didn’t have such strong relationships … weren’t as successful. 

Some employers may not realize they have to register online to schedule an application filing. Gonzalez recommends business owners secure their filing date immediately. 

“I’ve got to think this money will run out in the first week because of the backlog and the new applications,” Gonzalez notes. “I would go apply immediately… I would act [Friday].

In addition to the PPP, many states also have secondary loan and credit programs, employers should check with their local Chamber of Commerce for those programs. If business owners qualify as a minority-owned business, the federal government has additional incentives through the Minority Business Development Agency. 

If employers anticipate any upcoming financial issues they should also contact their bank to inquire about or request loan payment grace periods. Most banks will grant the request.

CPAs can also be a major asset for business owners at this time. A good CPA can gauge how the new tax laws affect business owners and allow them to claim refunds. Employers should also contact their payroll company to take advantage of payroll tax deferrals and other tax credits established during the pandemic. 

“If you’re a small business or self employed you’re already wired to be entrepreneurial,” Gonzalez says. “You have to use that entrepreneurial spirit to go advocate for yourself when it comes to these loan programs.”