Facebook is joining the US supply chain finance (SCF) market, offering to buy the invoices of small businesses owned and run by women, racial and ethnic minorities, veterans, people with disabilities and those from the LGBTQ+ community.

Eligible businesses will be able to apply to join the Invoice Fast Track programme from October 1, and will pay the social media giant a flat fee of 1% of an invoice value. They do not have to be Facebook suppliers.

A Facebook spokesperson tells GTR the social media giant will fund up to US$100mn in invoices over US$1,000 “on an ongoing basis”. The company will then seek payment from the businesses’ customers under the originally agreed terms.

Small firms accepted into the scheme will “have the opportunity to get cash immediately for the goods and services they’ve invoiced their customers, instead of waiting the 60 to 120 day period it normally takes to get paid”, Facebook chief operating officer Sheryl Sandberg says in a blog post.

A recent global survey of small businesses conducted by the company found that while there has been a drop in the number of businesses who are closed due to the pandemic, the number of those that are open but have been forced to shed workers has risen from 30% in February to 36% in July. Around 60% said they were struggling to meet some expenses.

Sandberg says the survey found that “women and minority-led businesses were still more likely to be closed than the global average”.

“In the US, Hispanic-led businesses were the most likely to report being closed at 24%, a drop of two percentage points since February. Minority-led businesses in the US were also more likely to report lower sales compared to the same period in the previous year, with 44% doing so compared to 29% of other small businesses.”

The company is not establishing its own platform but instead using that of Detroit-based Supplier Success, which the Facebook spokesperson describes as a “minority-owned company that specialises in supplier finance and corporate diversity consultancy”.

To be eligible for the programme, businesses must be certified by one of Facebook’s partner organisations, such as the National LGBT Chamber of Commerce and National Minority Supplier Development Council.

They “must also have invoices with corporate or government customers that have an investment-grade rating”, according to the company’s website.

Facebook has no current plans to extend the Invoice Fast Track programme beyond the US, the spokesperson says.

The nationwide rollout follows a “very small” pilot with selected Facebook suppliers, the company’s vice-president for small business Rich Rao told CNBC earlier in September.

“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?’” he is quoted as saying.

Facebook expects around 30,000 businesses will be able to take advantage of the product, according to Rao.

The company already offers several solutions to small businesses, a sector that widely uses Facebook for paid advertising.