Twenty new corporations — including Intel, Hallmark, and ConAgra — have signed on to an Obama administration program that commits them to pay their small business contractors faster, the White House announced Monday.
On average, corporations take 46 days to pay their invoices — up from 35 days in March 2009, according to a study by Georgia Tech. As a result, small businesses are facing a cash crunch that restricts growth.
{mosads}The private-sector program, called SupplierPay, is modeled on an Obama initiative called QuickPay that requires federal agencies to expedite payments to small business contractors. When businesses receive payment sooner, the White House says, they’re more easily able to invest in new business opportunities, equipment, and hiring.
National Economic Council Director Jeff Zients and Small Business Administration chief Maria Contreras-Sweet will host representatives from the companies that have signed on to SupplierPay —as well as the more than two dozen corporations already involved — Monday at the White House.
“The working session will bring together both existing and new SupplierPay companies to discuss actions companies are taking to implement the SupplierPay pledge, and ensure the metrics are in place to track and measure impact of this initiative going forward,” said a White House official.
Other companies joining the effort include Internet shoe retailer Zappos, document management giant Xerox, and manufacturing conglomerate 3M. Siemens, as part of its commitment, is launching a finance program for the 1,300 contractors in its North American supply chain to help them cope with cash flow issues.
The White House says the commitments represent billions in accelerated payments. Lockheed Martin, one of the original participants, did an estimated $4.9 billion of business with small businesses over the last fiscal year alone.