President Obama Announces New Partnership with the Private Sector to Strengthen America’s Small Businesses; Renews the Federal Government’s QuickPay Initiative
As a part of his Year of Action, the President is using the power of his pen and phone wherever he can on behalf of the American people to create jobs and help hard-working Americans get ahead. Today, the President will announce the creation of SupplierPay, a new partnership with the private sector to strengthen small businesses by increasing their working capital, so they can grow their businesses and hire more workers.
To launch SupplierPay, the President is bringing 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.
President Obama, Senior Advisor Valerie Jarrett, National Economic Council Director Jeff Zients, and Small Business Administrator Maria Contreras-Sweet will host a meeting at the White House today with these businesses and their suppliers to discuss what more can be done to strengthen small businesses, building on the successes of the QuickPay program.
SupplierPay builds on the success of the Federal Government’s QuickPay initiative, which President Obama launched in 2011. QuickPay requires federal agencies to expedite payments to small business contractors with the goal of paying within 15 days. As a result of QuickPay, we have already seen well over $1 billion in cost savings for small businesses since 2011, leading to greater investment and job creation. SupplierPay is the private sector’s equivalent, where companies have committed to pay small suppliers faster or help them get access to lower cost capital.
Also today, the President is renewing 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. Today’s announcement means faster payment for all small business subcontractors and even more business opportunities, more investment in small businesses, and more hiring.
The following companies have signed on to SupplierPay:
|Rothschild North America
|Johnson & Johnson
|Westinghouse Electric Company
QuickPay and SupplierPay: Growing our Small Businesses
Small business play a vital role in the American economy – employing half of our country's workforce, creating nearly two out of every three new American jobs, and often being the source of the next great American innovation.
Small businesses were disproportionately impacted by the Great Recession, losing 40 percent more jobs than the rest of the private sector combined. When the President took office small business credit markets were effectively frozen. Today, trends are moving in the right direction; according to a recent survey, small business confidence is near the highest levels since the fall of 2007 and small businesses are back to creating two of out of every three net new jobs.
Small business capital access has been an area of focus for this Administration, starting with the Recovery Act in 2009, the Small Business Jobs Act in 2010 and the JOBS Act in 2012. Collectively, this legislation has been instrumental in driving improvement from the depths of the recession. The Administration has achieved record SBA small business lending volumes and recent Federal Reserve Small Business surveys indicate improved access to financing. Yet, more can be done – too many small businesses still struggle to access the capital they need:
- A 2014 Pepperdine and D&B study reported that 66 percent of small businesses found it “difficult to raise new business financing.”
- Capital access challenges are magnified by the fact that small businesses are waiting longer to get paid for their products and services. According to different estimates, small business invoices go unpaid for 55-60 days on average and payments “past due” are increasing. As a result, small businesses are spending unnecessary funds to cover cash flow issues caused by late payments. These are funds that could be otherwise spent on growing their business and creating new jobs.
SupplierPay Case Studies:
Company Commitment: Intuit
Company and Small Business Supplier Case Study:
Company and Small Business Supplier Case Study:
Impact of the QuickPay Initiative:
QuickPay Has Delivered Meaningful Results: QuickPay has accelerated more than $220 billion in payments to federal contractors and generated savings well over $1 billion for small suppliers, increasing growth and jobs. When businesses get paid faster, their financial footing gets stronger. And with nearly $90 billion each year in federal contracts going to small businesses, cutting in half the time it takes for them to receive payment is a powerful way to help businesses make the decision to go ahead and buy another piece of equipment or hire another worker.
Examples of QuickPay’s Impact
The ELOCEN Group
Sarakki Associates, Inc.