By Salvador Rodriguez, CNBC
Facebook this week announced a $100 million commitment to a program that supports small businesses owned by women and minorities by buying up their outstanding invoices.
By buying up outstanding invoices, the Facebook Invoice Fast Track program puts money in the hands of small businesses that would have otherwise had to wait weeks if not months to get paid by their customers.
The program is the latest effort by Facebook to build its relationships and long-term loyalty among small businesses, many of whom rely on the social network to place ads targeted to niche demographics who may be interested in their services.
Businesses can submit outstanding invoices of a minimum of $1,000, and if accepted, Facebook will buy the invoice from the small business and pay them within a matter of days. The customers then pay Facebook the outstanding invoices at the same terms they had agreed to with the small business. For Facebook, which generated nearly $86 billion in revenue in 2020, waiting for payments is much less dire than it is for small businesses.
Facebook piloted a smaller version of the program in 2020 after hearing how much the company’s suppliers were struggling in the wake of the Covid-19 pandemic, said Rich Rao, Facebook’s vice president of small business.
“We just heard first-hand the financial hardships that these suppliers were facing, and it was created really quickly and brought up as an idea and pitched to our CFO to say, ‘Hey, would we be able to help our suppliers with this?’” Rao said. “It was a very small pilot, but we did see that be very successful.”
Now, Facebook is drastically expanding the program and will buy up to $100 million in outstanding invoices. Rao estimates this will support approximately 30,000 small businesses.
“It’s a new concept, but we’re really excited about it,” Rao said.
U.S. businesses owned by women and minorities, and that are members of supplier organizations that serve underrepresented groups, are eligible to apply for the program. This includes the National Minority Supplier Development Council, Women’s Business Enterprise National Council, National LGBT Chamber of Commerce, the National Veterans Business Development Council, Disability: IN and the U.S. Pan Asian American Chamber of Commerce. Facebook is also exploring adding more partner organizations for the program, the company told CNBC.
Click here to read the full article on CNBC.
Original Article Here.