Facebook Inc. (NASDAQ: FB) announced a $100 million commitment to a program that buys unpaid bills from small businesses run by minorities and women this week. Notably, the Facebook Invoice Fast Track initiative buys outstanding invoices, putting cash in small businesses’ hands that would otherwise have to wait weeks, even months, for payment from their customers.
Facebook buying unpaid bills from small businesses
The program is Facebook’s latest attempt to strengthen its long-term loyalty and relationship with small businesses, most of which depend on the social network to post ads targeted to specific populations who might be interested in their products.
As per the program, small businesses are eligible to submit outstanding invoices of at least $1,000. Once approved, Facebook will purchase the invoice from the small business and pay it within days. Customers will pay their outstanding invoices to Facebook under the same terms as they had with the small business. For a company that generated almost $86 billion in 2020, waiting for payments is less of a problem than for small businesses.
Facebook’s VP of small businesses said that the company piloted a similar program following the COVID-19 pandemic, which led to suppliers struggling. Rao said:
“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? It was a very small pilot, but we did see that be very successful. It’s a new concept, but we’re really excited about it”
Facebook to buy up to $100 million unpaid invoices
Now, Facebook is ramping up the scheme, offering to acquire up to $100 million in unpaid invoices. Rao predicts that 30,000 small enterprises will benefit from this.
Among those that benefited from the pilot program is The Wright Stuff Chics co-founder Lisa Dunnigan. The company canceled all in-person events during the pandemic and announced a virtual version of the Teach Your Heart Out Conference. Teachers registered for the conference but most paid through purchase orders that take longer to be paid out. Lisa said that she collected the applications and submitted them to Facebook, and she was paid over $10,000 within days. She said:
“This program has been a life saver for our company. We were just overwhelmed by the stories that came back.”
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