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How changes to PPP can help Latinx small businesses

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This episode of the Sage Thought Leadership Podcast features Jose Zavala. Jose is founder and principal disruptor at ZTX advisors. Jose has eight years of public accounting experience and has spent his career working with small and medium businesses through various CPA firms. Jose’s specialties include advisory, income tax preparation, and planning services.

Why do you do what you do?

Jose Zavala: That’s a great question. It’s all about helping people. I’ve always had the ability to help people… I’ve always wanted to do something that was going to provide some kind of value and help somebody. I’ve been like that since I was a kid.

Originally, I wanted to be a math teacher because I wanted to teach. I love math, I’m one of those math geeks. Then I realized, I don’t want to be just a teacher. I got to thinking about accounting. We all know now that accounting isn’t just numbers, but I got into working with clients. And I realized the difference I can make helping people really success, build their dreams, what they want to do, and it all led into this.

Now I’m able to help people and make sure they understand how to run their businesses, how to effectively scale and grow. Then, I realized that there was a big gap in the Latino community. That’s when I decided, ok, I would like to provide some service for my community and help build the wealth that way.

So, it’s just been a step-by-step process to be able to get to that. I love to help people and to help somebody achieve their dream and say, I made the American Dream happen, and to be part of that is something amazing.

Let’s talk about the impact of COVID-19 on the Latinx community

Jose Zavala: It’s been devastating. Traditionally, the Latinx community does not have the same access to funding to grants or loans as other communities do.

Whether it’s because they’re ITIN (Individual Taxpayer Identification Number) holders, or they may be legal residents or citizens, but they may not understand what’s going on, are very weary, or scared of the IRS.

There are people serving the community that have good intentions, but just don’t have the educational background to really help them properly the way they should. Because of that, you’ll see the Latinx community is super underfunded. They’re the ones most impacted, especially health wise as far as COVID goes. They got hit really hard.

On top of that, businesses are struggling because they’re having to find ways to survive with limited access to funds. It’s been a tough year for the community, but at the same time, you see the power and the love and how the community is starting to help each other.

How do you think changes to PPP and are going to affect the folks you work with day to day?

Jose Zavala: It’s going to be tremendous. It just came out that rather than using the net [income] amount from line 31 on your Schedule C, you can use your gross income amount. ITIN holders, if they have employees, can get access to the money as well.

That’s going to be really beneficial. While ITIN holders may not be necessarily citizens, they still pay taxes, and they still file tax returns. They don’t get access to a lot of the credits or a lot of the deductions that traditionally you get being a citizen, but they still want to be 100% correct.

ITIN holders are out there hustling, making money, and paying their fair share of taxes. Opening this up to them is going to be beneficial, because if you’re in an industry where margins are really small, like a small mom and pop taco restaurant, your net income is going to be minimal.

But if you look at your gross income, that’s going to open up a bit more and provide more access to capital to get you past that hump. So that we can survive this and kind of get back “normal”.

Cases continue to fall, and we certainly hope that continues to be the case. But we never know when this thing is going to turn around again. Is there anything that has been helpful from a gig worker perspective regarding PPP?

Jose Zavala: The big thing is to make sure to work with somebody that knows what they’re doing. There are people out there actively trying to defraud the system and just make a quick buck.

There was a guy who contacted one of [my colleague’s] clients and said, ‘Hey, I can get you PPP money.’ For this second round of PPP, you had to have a 25% reduction in revenue.

Well, this client did not have 25% reduction. This person approached them and said for X amount, I can guarantee PPP for you. After we had a conversation with him, he was just throwing out payroll numbers.

And it’s like, no, that has nothing to do with revenue reduction. He said, ‘Oh, I can make up bank statements to show that.’

You just don’t mess with that. This is government money. That’s legit fraud… you’re going to go to jail for that.

But that’s the thing, there are a lot of people taking advantage. For all those looking for help, there are people that see this as an advantage to skirt the system and somehow push it through. But when it comes time for the forgiveness portion. That’s a different story.

How can somebody contact you?

Jose Zavala: Twitter, Instagram, and ztxadvisors.com. Email [email protected]. I’m always open to meeting new people.

 

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