(PresidentialInsider.com)- Facebook is going out of its comfort zone and creating a new program to help small businesses that are owned by minorities and women.
This week, the social media giant announced it would pledge $100 million to buy outstanding invoices that these companies have. The program, called the Facebook Invoice Fast Track, would put money into the pockets of these small business owners that normally would have to wait for those outstanding invoices to be paid.
Facebook is trying to build a better relationship with small business owners, especially those owned by minorities and women. The company is probably hoping that by helping these companies out financially, they’ll turn around and spend some of it on advertising on the social media platform.
Businesses that are eligible can submit their outstanding invoices to Facebook. The invoices have to be for at least $1,000. If Facebook accepts it, the company will buy the invoice from them, and pay them within only a few days.
Customers will then pay Facebook directly for the outstanding invoices, on the same terms that were originally agreed upon with the small business. The social media company doesn’t have to worry about waiting to collect on these smaller invoices, since it has a treasure trove of cash in the bank.
In 2020, Facebook piloted a similar program to try to help companies that were struggling during the coronavirus pandemic.
The vice president of small business at Facebook, Rich Rao, explained of the program:
“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.”
Any business based in the U.S. that is owned by a minority or woman and are members of supplier organizations that serve underrepresented groups can apply to Facebook’s program.
Some of these groups include the U.S. Pan Asian American Chamber of Commerce, the National Veterans Business Development Council, National LGBT Chamber of Commerce, Women’s Business Enterprise National Council, and National Minority Supplier Development Council.
CNBC spoke to one business owner who has already gone through Facebook’s pilot program.
The co-founder of The Wright Stuff Chics, Lisa Dunnigan, said all the in-person events her company was hosting had to be canceled in 2020 because of the pandemic. Her company, which sells merchandise for teachers, had invoices of more than $10,000 be paid by Facebook in only a few days.
“This program has been a life saver for our company.”
Facebook intends to expand their pilot program to the full one on October 1. On that date, businesses can start applying to have their invoices of at least $1,000 paid by Facebook.