Facebook is the latest tech company to enter the small business financing space. Starting October 1st, Facebook will begin offering eligible American businesses the opportunity to sell their invoice receivables for cash upfront. The only cost is a 1% fee of the A/R and invoices can be as small as $1,000.
Dubbed Facebook Invoice Fast Track, a promotional video touts it as a solution to cash flow challenges.
The caveat is that it will only be open to businesses owned by minorities, females, veterans, LGBTQ+ or someone with a certified disability. Also, the invoices must be issued to a corporation or government entity with an investment-grade rating. An outstanding invoice from something like “Joe’s corner t-shirt shop” for example, would not be eligible.
Facebook COO Sheryl Sandberg predicts the company will be funding $100 million in invoices on an ongoing basis.
That’s not all, however. The company is also introducing a new small business loan resource through an arrangement with Connect2Capital. Facebook claims that in doing so, it is not “brokering” loans.
The developments may not be all that unsurprising given Facebook’s recent foray into India’s small business loan market.
Last modified: September 11, 2021