Facebook to buy $ 100 million in bills from various companies

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

By redeeming unpaid invoices, the Facebook Invoice Fast Track program puts money in the hands of small businesses that would otherwise have had 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 targeted ads to niche demographics likely to be interested in their businesses. services.

Businesses can submit unpaid bills of a minimum of $ 1,000, and if accepted, Facebook will buy the bill from the small business and pay it off within days. Customers then pay Facebook the unpaid bills on the same terms they agreed with the small business. For Facebook, which generated nearly $ 86 billion in revenue in 2020, waiting for payments is much less of a pain than it is for small businesses.

Facebook piloted a smaller version of the program in 2020 after hearing how the company’s suppliers were struggling in the wake of the Covid-19 pandemic, said Rich Rao, Facebook vice president of small businesses.

“We just heard firsthand the financial difficulties that these vendors were facing, and it was created very quickly and presented as an idea and presented to our CFO to say, ‘Hey, would we be able to help our suppliers with this? “” Said Rao. “He was a very small rider, but we saw him be very successful.”

Now Facebook is dramatically expanding the program and will buy up to $ 100 million in unpaid bills. Rao estimates that this will support 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. This includes the National Minority Supplier Development Council, the Women’s Business Enterprise National Council, the National LGBT Chamber of Commerce, the National Veterans Business Development Council, Disability: IN, and the US Pan Asian American Chamber of Commerce. Facebook is also considering adding other partner organizations to the program, the company told CNBC.

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

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

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

Since then, Dunnigan has said she has applied to the program again and Facebook has paid her unpaid bills on multiple occasions.

Dunnigan’s story is one of many views on Facebook after their pilot launched that told the company it was worth expanding, Rao said.

“We were overwhelmed by the stories that came back,” he said.

Interested companies will be able to start applying on October 1 after the official extension of the program, Facebook said.