Facebook has committed a $100 million program to support small businesses owned by women and minorities by buying their outstanding invoices. The Facebook Invoice Fast Track program puts money in the hands of small businesses.
According to a report from Facebook, 60% of SMBs say they had difficulty paying business-related expenses and roughly a quarter reported struggling to pay down loans or debt, bills, rent and employee wages.
As such, the Facebook Invoice Fast Track program will help get businesses paid faster. Eligible US-based small businesses, beginning October 1, will have the opportunity to get cash immediately for the goods and services they have invoiced their customers. After the business receives payment from Facebook, the client then has to deal with the platform directly.
Facebook said the invoices must have a minimum value of $1,000 and be submitted to your customer for payment. “Generally, your customers must have an investment-grade rating. In most cases, participating companies must sell all eligible invoices they have with those customers. Other restrictions may apply, and not all submitted invoices will be funded.” The program helps suppliers improve cash flow, purchase inventory, hire employees, invest in growth and most importantly stay in the game. Facebook is committed to helping small, midsize and diverse-owned businesses. Strong suppliers are important to the functioning of the company and the global economy.
The program is the latest effort by the social media giant 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.
Rich Rao, Facebook’s vice president of small business, said the company 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. “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.”
Rao estimates the program will support up to 30,000 small businesses.