Facebook To Buy $ 100 Million In Invoices From Diverse Businesses

Facebook To Buy $ 100 Million In Invoices From Diverse Businesses

Facebook CEO Mark Zuckerberg

Chess | Getty Images News | Getty Images

Facebook announced this week a $ 100 million pledge to a program that supports small businesses owned by women and minorities by buying their unpaid bills.

By buying the unpaid invoices, the Facebook Invoice Fast Track program puts money in the hands of small businesses that would have to wait weeks, if not months, to be paid by their customers.

The program is Facebook’s latest effort to build long-term relationships and loyalty among small businesses, many of which rely on the social network to place ads targeted to specific demographics who may be interested in their services. .

Businesses can submit an overdue bill of at least $ 1,000, and if accepted, Facebook will buy the small business’s bills and pay them off within days. Customers then pay Facebook’s unpaid bills on the same terms they agreed with the small business. For Facebook, which generated nearly $ 86 billion in revenue in 2020, the wait for payments is far less serious than for small businesses.

Facebook vice president of small business Rich Rao said Facebook rolled out a smaller version of the program in 2020 after hearing how the company’s suppliers were struggling in the wake of the COVID pandemic. 19.

“We just had the financial hardship for the first time that these vendors are facing, and it was built up really quickly and pitched as an idea and our CFO decided to say, ‘Hey, will we be able to help our suppliers with this? “,” Said Rao. “He was a very small driver, but we saw that he was very successful.”

Now Facebook is rapidly expanding the program and will buy up to $ 100 million in unpaid bills. Rao estimates that this will help around 30,000 small businesses.

“It’s a new concept, but we’re really excited about it,” Rao said.

Women-owned and minority-owned U.S. businesses that are members of vendor organizations that serve under-represented groups are eligible to apply for the program. These include the National Minority Supplier Development Council, the National Council on Women’s Business Enterprise, the National LGBT Chamber of Commerce, the National Veterans Business Development Council, Disability: IN and the US Pan Asian American Chamber of Commerce. The company told CNBC that Facebook is also looking to add more affiliates to the program.

Lisa Dunnigan, co-founder of The Right Stuff Chicks, has relied on the Facebook Invoice Fast Track program to keep her business afloat.

Courtesy of Facebook

Among the entrepreneurs who have already participated in the program’s pilot is Lisa Dunnigan, co-founder of The Right Stuff Chicks, which sells merchandise for teachers and hosts Teach Your Heart Out lectures for teachers.

After the pandemic forced Dunnigan to cancel all individual corporate events in 2020, the Dunnigan-based company announced a virtual version of its Teach Your Heart Out conference scheduled for July. Dunnigan said teachers signed up for the conference in early 2021, but many paid with purchase orders, which takes “a very long time” to pay off. After collecting the applications, Dunnigan submitted them to Facebook, and the company paid him over $ 10,000 in just a few days.

“This program saved the life of our business,” said Dunnigan, who was featured by Facebook to CNBC.

Since then, Dunnigan has said he has applied for the program again and Facebook has paid his unpaid bills on multiple occasions.

Rao said the Dunnigan story is just one of many stories Facebook has seen since launching its pilot, which signaled to the company that it was something worth doing. be lifted.

“We have been overwhelmed with the stories to come back,” he said.

Facebook said interested companies will be able to start applying on October 1, once the program is officially extended.

.

LEAVE A REPLY

Please enter your comment!
Please enter your name here