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A New Strategy to “Drive” Small Business Growth

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A New Strategy to “Drive” Small Business Growth

By ngoriel, SBA Official
Published: July 11, 2014 Updated: July 14, 2014

Three years ago, entrepreneur Maurice Brewster made one of the best business decisions of his life: He signed his limousine company, Mosaic Transportation, up for IBM’s Supplier Connection – a collaboration between small businesses and the supply chains of Fortune 500 corporations

It was a wise decision because small firms that enter the supply chains of major corporations grow their revenue by an average of 250 percent and their workforce by an average of 150 percent.

In three years, Maurice has signed contracts with seven major corporations, grown Mosaic from 20 to 46 employees, and tripled his annual revenues. His company had lost half of its business during the Recession, but now it is reaping record profits. Maurice credits this remarkable turnaround to two things: he joined a corporate supply chain, and all seven of his new clients pay him up front with a corporate credit card.

Unfortunately, most Mosaic clients take far longer to pay; it took one company seven months to cut his check. Maurice says if every client paid him on time, he would expand tomorrow to New York and Los Angeles and create dozens of new jobs.

This is a common complaint from America’s small business owners. Timely payments and the cost of working capital can make or break a small business. And these ingredients are essential to job creation and economic growth.

Today, SBA Administrator Maria Contreras-Sweet joined President Obama at the White House to announce the launch of SupplierPay. It’s a new project dedicated to giving America’s entrepreneurs access to affordable, consistent working capital. It’s about paying them on time and keeping their interest rates low, so they can invest in new equipment, new products and new people.

Twenty-six major corporations have already signed up. They’ve pledged to shorten payment times or provide other creative financing solutions, so their small business suppliers have the confidence to hire more workers and expand their operations.

SBA will take the lead in recruiting additional corporations to join this endeavor.  We have a great case to make, because SupplierPay is a win-win for small businesses and their corporate partners. Supply chains are often shared across an entire industry, so there’s a positive spillover effect when capital costs are lowered. It reduces the price of goods and services. It allows investments in human capital that reduce preventable errors. It increases returns on cash and improves the overall stability of supply chains.

President Obama promised the American people he would use the power of his office to make progress on their behalf. Whether you’re a limo company, an auto parts maker or an IT services company, getting paid faster and on more favorable terms is a surefire way to drive job growth and help put America on the road to a more prosperous future.

About the Author:

Natale Goriel

SBA Official

Hi, my name is Natale and I'm serving as a Moderator for the SBA Community. Our goal is to continually improve this site to meet your needs, so we appreciate your feedback and participation.


I think this program is great for businesses that are in that sector. However, it doesn't do anything for companies that need to get bank financing, such as construction. Most banks have just shut down their lending to construction companies which forces us to seek lending elsewhere, such as factors at much higher interest rates and that's only if they are available. After being in business 30 years and surviving the most awful past 5 years, this is worst conditions I have ever encountered in trying to obtain bank financing. And the SBA program just takes way too long.
The banks are not lending and your industry in particular is tough as it is categorized by bankers as "high risk" which is utter non-sense. There are, as you say, alternative solutions but lot of them are wolves in sheep's clothing. The good news is that alternative lending is getting more aggressive now by lending to the construction industry and there are good products available to companies with sound cash flow management. Find a trusted advisor in the alternative lending space and determine your options as they have changed for the better.
We recommend that our clients do an internal audit to make sure they are prepared to handle the growth that comes from becoming service and product suppliers to larger businesses. Often such expansion is costly. Also, the idea that this program help's "America’s entrepreneurs access to affordable, consistent working capital," is debateable. This is a pledge to pay on time or within a span of time, not an assurance. But it is a step in the right direction.
Congratulations on this important initiative that will become an important cash flow strengthening tool for small business owners who frequently have to struggle for short term financing when payments are delayed. I hope many more corporations join the initiative. Kindly check the links to see the Corporations list (I could not retrieve it).
I like the article, but the link to the SupplierPay .pdf document doesn't work for me. Would like to read it as well.
You can read it here:
Thank you for the link. I will read the .pdf tonight.
Timely payments has always been a common complaint by small business owners, who always had to fight to get the money on time, to further make its usage in betterment of the company. With evolution of new strategy for getting the payment on time, will definitely help small business holders to boast their business in better manner.


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