There are not many other greater pains for entrepreneurs than chasing down payment for work provided. Especially at a time when every dollar counts, particularly for Black-owned businesses disproportionately affected by the pandemic.
To address the needs small businesses are facing with cash flow, Facebook recently announced two new ways for diverse businesses to access capital more easily.
Beginning October 1, eligible US-based small businesses will have the opportunity to get cash immediately for the goods and services they’ve invoiced their customers, instead of waiting the 60 to 120 day period it normally takes to get paid. Facebook will be funding $100 million in invoices on an ongoing basis.
By paying the outstanding invoices, the Facebook Invoice Fast Track program gives time and money back to small business owners that would have otherwise had to several weeks 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.
Per CNBC, 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.
$100 million commitment comes after Facebook initially launched a smaller form of the program last year. The company reportedly took action after discovering that many suppliers that use its site to boost exposure and reach targeted customers were facing challenges amid the COVID-19 pandemic.
Facebook said interested businesses will be able to start applying on Oct. 1 after the program officially expands.