Facebook is spending $100 million to buy up the outstanding invoices of small businesses owned by women, racial minorities, veterans, disabled people, and LGBTQ+ people, the company announced last week.
The Invoice Fast Track Program allows certain “small, midsize, and diverse-owned businesses” to submit outstanding invoices to Facebook.
The tech giant then buys the invoices, giving the business cash immediately, and the business’ customers pay Facebook instead.
The program is designed to help “diverse-owned” businesses improve their cash flow and hire more employees, according to the program’s description.
“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’s Chief Operating Officer Sheryl Sandberg said in a statement announcing the program.
To be eligible for the program, businesses must be certified by one of Facebook’s partner organizations as “majority-owned, operated and controlled by racial or ethnic minorities, women, U.S. military veterans, LGBTQ+ people or individuals with disabilities,” according to the program’s description. Invoices must also be at least $1,000 dollars to be eligible for the program.
When reached for comment, Lainie Mulvey, a Facebook spokesperson, said the company is focusing on women and minority-owned businesses because they were the hardest hit by the COVID-19 pandemic.
“U.S. minority led businesses were at least 50% more likely to report being closed, reduced employment, and reduction in sales compared to this time last year,” and “20% of women-led businesses closed compared to 16% of those led by men,” Mulvey told the Daily Caller News Foundation, citing statistics from Facebook’s Global State of Small Business report.
The program is estimated to help roughly 30,000 small businesses, Rich Rao, vice president of small business at Facebook, told CNBC.
“It’s a new concept, but we’re really excited about it,” Rao told the outlet.
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