SupplierPay will speed up the vendor payment process for small businesses and boost their access to capital. Here is what you need to know.Small businesses play an important role in the American economy – employing half of the American workforce and generating two out of every three new jobs. A Pepperdine and D&B study revealed that 66% of small businesses reported having trouble gaining access to new business financing. Delays in access to capital only make these matters worse, with small business invoices going unpaid for 55-60 days on average.
In July, the federal government unveiled a new partnership with the private sector designed to boost America’s small businesses. Called SupplierPay, this initiative will help increase small businesses’ access to working capital.
QuickPay, the predecessor to SupplierPay, requires all federal agencies to pay back business contractors within 15 days. The United States Small Business Administration noted, “When businesses get paid faster, their financial footing gets stronger… Cutting in half the time it takes for them to receive payment is a powerful way to help businesses make the decision to go ahead and buy another piece of equipment or hire another worker.” To date, QuickPay has generated savings of over $1 billion for small suppliers. SupplierPay is designed to build on the success of this federal initiative.
Small businesses that supply large businesses can benefit from the SupplierPay initiative by having more capital to invest in new opportunities, new equipment, and new hiring. For large businesses, enrolling in SupplierPay is voluntary, but the program has already attracted many well-known brands that have recognized how important cash flow is to the small businesses that supply important products and services. In fact, 26 companies have already taken the SupplierPay pledge. A complete list of the large businesses taking part in SupplierPay is available.