With an open letter to the Federal Reserve Bank and the U.S. government, C2FO is requesting immediate action to offer relief to small and medium-sized businesses in the United States. In the letter, C2FO Founder and CEO Sandy Kemper advocated for a Small Business Supplier Protection Plan that would provide Fortune 1000 firms in the U.S. with low-cost funding to immediately pay SMBs, per an announcement.
Small firms usually only have a few weeks of cash available, but many have sizable accounts receivable – often representing 60 to 90 days of sales. Through a proposed Small Business Supplier Protection Plan, low-cost funds would be advanced to the SMBs’ larger clients in the country for immediate payment to the SMBs, which would convert their accounts receivable into cash.
The company claims the plan could boost the American economy with up to $580 billion of cash relief, which would also aid the more than 60 million workers of those SMBs.
“In this economic crisis, the greatest financial relief we can give small and mid-sized businesses is faster payment of their outstanding invoices,” Kemper said in the announcement. “The government and banks have stepped in with emergency lending, but much work remains to address the full needs of small and mid-sized businesses. If implemented quickly, we believe this solution could solve a significant part of the crisis for millions of businesses in need of capital in the U.S.”
In separate news, British grocers are promising faster supplier payments. Aldi and Sainsbury’s are joining an increasing number of retailers vowing to cut the time it takes to pay suppliers amid the continuing coronavirus pandemic. The merchants follow in the footsteps of others such as Morrisons and Tesco. Sainsbury’s said it would be offering 1,500 suppliers with under £100,000 in yearly turnover with instant payments, while Aldi also planned to reduce payment terms.