White House Launches SupplierPay InitiativeJuly 16, 2014
On July 11, President Barack Obama met with businesses, their suppliers and the head of the U.S. Small Business Administration (SBA) to launch a new program called SupplierPay, to ensure that large corporations pay their small contractors in a more timely fashion in order to increase cash flow through the supply chain.
Similar to the Federal Government’s QuickPay initiative created in 2011 that ensures federal employers pay back contractors in a timely-manner, this new SupplierPay program’s guideline is the private sector’s equivalent. Traditionally, companies take as long as two months to pay their contractors, but with SupplierPay, small contractors must be paid within 15 days of submitting invoices.
The goal of SupplierPay is to help small businesses avoid borrowing money to account for supply chain delays. When a large company takes a long time to pay back a small firm, the small firm can have difficulties paying their own subcontractors or making capital investments.
To launch SupplierPay, the President brought together 26 companies – both large and small – that have committed to the initiative. For the larger companies, joining SupplierPay demonstrates a recognition that a healthy supply chain is good for business. For the small-business suppliers, benefiting from SupplierPay means having more capital to invest in new opportunities, new equipment and new hiring.
Additionally, the President announced the renewal of QuickPay for federal small-business subcontractors, where the government pays its large contractors faster and, in return, requires them to pay their small-business subcontractors faster. QuickPay for small-business subcontractors, which began in 2012, was only available temporarily for many small-business subcontractors.
Here is the full list of the 26 companies currently signed on to the SupplierPay program:
Rothschild North America
Johnson & Johnson
To learn more about the SupplierPay program, please click here.