The Invoice Fast Track program will pay the invoices of small businesses that had to otherwise wait weeks or months to be paid by their customers.
The program is Facebook’s latest attempt at building its relationships and loyalty with small businesses, many of which rely on the tech giant to place targeted ads to particular demographics who may be interested in their services.
Eligible small businesses can submit outstanding invoices of a minimum of $1,000, and if accepted, Facebook will buy the invoice from the business and reimburse them within days.
Customers will pay Facebook the outstanding invoices upon the same terms they had agreed to with the business.
Last year, the tech giant generated almost $86 billion in revenue, making its founder, Mark Zuckerberg, the fifth richest person on the planet.
His company piloted a minor version of the program in 2020 after hearing how much the company’s suppliers were struggling in the wake of the Covid-19 pandemic.
Facebook’s vice president of small business, Rich Rao, told CNBC the pilot program was “very successful.”
“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?’” Rao said.
“It was a very small pilot, but we did see that be very successful.”
Rao estimates the new Invoice Fast Track program will support roughly 30,000 small businesses.
“It’s a new concept, but we’re really excited about it,” Rao added.
Only businesses owned by women and minorities, and members of supplier organisations which specifically serve underrepresented groups are eligible to apply for the program.
One of the entrepreneurs who went through last year’s pilot program is Lisa Dunnigan, co-founder of the The Wright Stuff Chics, a Georgia-based business that sells merchandise for teachers and holds the annual Teach Your Heart Out teachers conference in Atlanta.
When the pandemic forced Dunnigan to cancel all her company’s in-person events last year, her business shifted the Teach Your Heart Out conference online.
Dunnigan told CNBC that many participants registered for the conference early this year, but paid with purchase orders which take “a very long time” to be processed.
Once she collected the applications, Dunnigan submitted them to Facebook, and the company reimbursed her more than $10,000 within a few days.
“This program has been a life saver for our company,” Dunnigan told CNBC.
Rich Rao said they have received many positive feedback from the program.
“We were just overwhelmed by the stories that came back,” he said.