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Gusto

Other company

PPP · ERC
Type
Company or group
Role
Other company
Programs
PPP, ERC
Updated

The profile

A venture-backed payroll company that in April 2020 pulled PPP paperwork for more than 70,000 customers, said they "qualified for $3.4 billion," and sent them to lenders including Cross River Bank, Funding Circle, Fundera and Lendio. For the Employee Retention Credit it amended its customers' payroll returns itself and brought in outside specialists, Clarus in 2021 and then Arvo Tech as its "exclusive" ERC provider.

Identity and role

Gusto is a San Francisco payroll, benefits and HR platform for small businesses. Its April 2020 promotion terms give the legal name as "ZenPayroll, Inc., dba Gusto." In 2021 it announced a $175 million Series E "led by T. Rowe Price Associates, Inc.," with investors including Fidelity, Generation Investment Management, General Catalyst, Emergence Capital and Dragoneer Investment Group, and said it served "more than 200,000 businesses." By August 2023 a partner's release put the figure at more than 300,000.

Pandemic-relief role: PPP

Gusto was not a PPP lender; it sent customers to lenders. In April 2020 its PPP page told visitors, customers or not: "We've partnered with lenders available to help any small business apply for funds and get back on track. You don't need to be a customer to get a 100% forgivable loan." Visitors entered an email address "to find a lender." Customers got a shortcut: "Sign in to calculate your total loan and download your payroll report."

In a post published April 23, 2020 and updated September 3, Gusto's lead counsel for financial services, Jeanette Quick, put a number on it: "Gusto has helped more than 70,000 customers get the documentation required to apply for aid," and "these 70,000 businesses have qualified for $3.4 billion in government funding." That works out to about $48,600 per business. "Qualified for" is Gusto's phrase; the post does not say how many loans were funded. It named the lenders: "We've partnered with large-scale lenders, including Cross River Bank, Funding Circle, Fundera and Lendio, to make it easy for customers to get funding fast." The same post said the SBA's average PPP loan to date, $206,000, was "more than four times the aid that we estimate our small businesses need." A co-branded "Gusto - Paycheck Protection Program" page ran on Biz2Credit's site; it was online in September 2021, after applications had closed. None of these pages says whether lenders paid Gusto for referrals.

The SBA's PPP loan data (September 30, 2024 release) show no loan to ZenPayroll, Inc. They list two loans to a borrower named "Gusto, Inc." in Provincetown, Massachusetts, under industry code 722511: $61,100 approved on April 9, 2020 and $273,864.50 approved on March 16, 2021, both from Seamen's Bank and both forgiven. Nothing in the records connects that borrower to the San Francisco payroll company.

Pandemic-relief role: the Employee Retention Credit

For the Employee Retention Credit (ERC), Gusto's Help Center told customers in 2021 that "Gusto will apply your credit retroactively to any payrolls that were run once you became eligible. We will amend your quarterly filings to reflect this credit." Customers filed any Form 7200 advance request themselves and reported it to Gusto, and a credit for only part of a quarter meant amending Form 941 "outside of Gusto."

It also brought in specialists. On August 25, 2021, Clarus R+D announced "a partnership with Gusto" to "provide ERTC services to companies impacted by the pandemic," and said it had helped small businesses claim "$50MM in ERTC support." On August 23, 2023, Arvo Tech announced that it "has been Gusto's exclusive Employee Retention Credit (ERC) provider since late last year." Gusto customers, it said, could "automatically benefit from Arvo Tech's expertise in managing ERCs; this includes being notified when their business may be eligible to receive ERC and automating the complex paperwork involved." Neither release states a fee.

No enforcement action against Gusto over PPP or the ERC appears in the records we reviewed. None of the 3,953 Justice Department press releases from April 2020 through September 15, 2026 that mention COVID-19, the pandemic or a pandemic-relief program names the company. Its name does appear in one fraud case, as the brand on a document. The November 2020 criminal complaint against the Los Angeles PPP ring charged in United States v. Ayvazyan lists, among the documents submitted for one borrower, "A payroll report purported to have been prepared using 'Gusto.'"

Since 2023

Arvo Tech's August 2023 release said the two companies would add a Work Opportunity Tax Credit integration that fall.

Sources

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