How COVID-19 led to creation of Phoenix accounting firm that helps businesses unlock federal aid
When the COVID-19 pandemic hit and the CARES Act threw a much needed lifeline to small businesses, it piqued Eric Stenson interest.
His employer at the time was able to stay afloat thanks to a PPP (Payback Protection Program) loan as part of the CARES Act. While businesses and the finance world were focusing on the loan component, Stenson was transfixed on the long-term ramifications.
“It caused me to look closely at the CARES Act. I had a curiosity as to what Congress was doing to help small businesses and thought it was amazing for Congress to respond that quickly to get stimulus money into the economy,” Stenson said. “And a lightbulb went off.”
This curiously resulted in Stenson Tamaddon, the Phoenix technology accounting company formed to help small and medium businesses navigate the complicated process of securing economic stimulus benefits available to them.
Stenson realized banks had their work cut out for them to get those loans. But what then?
“Most were focused on how to get the loan but no one was thinking about forgiveness of the loan. The big problem was going to be with loan forgiveness,” Stenson said.
He approached friend and business partner Aaron Tamaddon about software that would deal with this. Equipped with proprietary software and a team with more than a combined 100 years of tax and regulatory expertise, Stenson and Tammaddon — along with their third business partner Ryan Louis — launched their company in 2020.
Payroll companies and CPAs turn to Stenson Tamaddon for assistance when filing for their clients. Understanding statutory language and close monitoring of changing regulations has made the firm a go-to source. The team regularly consults with the Small Business Administration and similar agencies regarding guidance and any unique circumstances.
“We focus on compliance. That was the biggest gap we saw in the market,” Stenson said.
They also help business owners maximize their eligible funding through stimulus programs such as the Employee Retention Credit, an incentive for employers to keep workers on the payroll during the pandemic. This program grants qualified businesses up to $26,000 per employee.
Clientele spans hospitality, fitness studios, public and private healthcare institutions, law firms, retail and automotive industries.
Raj Patel, the owner of Grand Canyon Hospitality, a hotel and food services company in Orange County, is among them.
Patel had benefited from a PPP loan, but his accountant was not familiar with the employee credit program. Research led him to Stenson Tamaddon.
“It’s a complicated process and he was not equipped to deal with it. You can mess it up if it’s not done right,” Patel said.
Conference calls and communications between Patel and Stenson Tamadoon were transparent about the steps of the process and Patel was walked through the details and kept updated.
Patel said the Employee Retention C is vital to keeping his business alive and his 44 employees collecting paychecks. A skeptical person by nature, Patel has confidence in the company.
“Even my CPA friends are not familiar with the process. It does require a speciality,” Patel said. “They have the knowledge. Multiple companies say they do this but Stenson did it well in terms of getting it done.”
Red tape leads to Plan C. It works
When Stenson Tamaddon launched, they did so with a platform that they could license to bank and non-bank lenders to specifically handle PPP loan forgiveness.
“We were two guys and a desk. And I had CEOs of large banks that were publicly traded calling my cell phone,” Stenson said.
But, they ran into a hiccup with the maze of administrative red tape required at that high level of corporate operations. These lenders suggested approaching other entities with less red tape, but those didn’t pan out either.
“No one wanted to do business with us,” Stenson said.
So they put Plan C into action. They started selling their software to accounting firms and those firms used it to generate loan forgiveness applications. The company did webinars to CPA societies, convincing them of the eventual customer demand for the service.
It worked. Soon, the company was doing $30,000-$50,000 a month in sales, Stenson said.
Then, a private school in Connecticut reached out to Stenson wanting to purchase his software. But he went a step further by doing a screen share and doing the process for the school. This, he said, allowed his company to pivot to a smaller market who wanted a professional to do it for them.
That was successful. Today, Stenson Tamaddon generates several million dollars in annual revenue, Stenson said.
“A lot of CPAs didn’t want to touch it. They understand terms and programs but don't understand other factors,” Stenson said. “We developed expertise … . Hundreds of CPAs started referring their clients to us.”
Today, Stenson Tamaddon has 4,000 mid-market business clients who came to it through the pandemic.
The company’s business model continues to evolve to include services aimed at various tax credit programs beyond those sparked by a global health crisis.
“We will continue to assist businesses with emerging credits and other tax policy initiatives. We will continue to build portals that focus on compliance,” Stenson said.
The company also wants to increase business owners’ confidence in their current tax position and pursue credits they could have.
“It’s rewarding knowing we built something that helps everyone,” Stenson said. “Our clients have stability and we help contribute to that stabilization.”
What: Stenson Tamaddon
Where: 1 N. Central Ave., Suite 1030, Phoenix
Employees: 120
Factoid: There are 32.5 million small businesses in the U.S., accounting for 99.9% of businesses, according to the Small Business Administration.
Details: 602-560-9393, stentam.com
This article originally appeared on Arizona Republic: Phoenix-based Stenson Tamaddon helps small business get COVID-19 aid
