Facebook announced last week a new plan that it will launch in October to help small businesses collect on unpaid invoices, perhaps setting up an eventual entry into consumer debt collections as well.
The majority of small businesses are still struggling financially, according to research that Facebook has conducted, so the social media giant is going to give those companies immediate access to cash for goods and services that have been invoiced, instead of those companies waiting for their customers to pay their bills. Called Facebook Invoice Fast Track, the program will take a 1% fee from the funds it collects.
About 60% of small businesses indicated they have had some form of financial difficulty paying their expenses, according to Facebook, including making loan payments, rent, and employee wages.
“Facebook is in the business of small business,” wrote Chief Operating Officer Sheryl Sandberg. “More than 200 million businesses use our apps every month to create virtual storefronts and reach customers — with millions using our tools to help them make the transition online since the start of the pandemic. Whatever challenges they face, Facebook will continue to do all we can to help them find success online.”
Facebook is being selective about the companies that are allowed to participate in Invoice Fast Track. “This program will be available to U.S. for-profit companies that are certified 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 website. “Companies must be certified by an approved partner organization. Generally, eligible companies must also have invoices with corporate or government customers that have an investment-grade rating.” As well, invoices must have a balance of at least $1,000 to be eligible to be funded.
A published report detailing the program noted that debt collectors can start communicating with individuals via social media on November 30 when Regulation F goes into effect. Could that bring about Facebook getting into consumer collections as well? I guess we will just have to wait and see.