Prompt Pay Pledge One Pager
Published
May 17, 2023
What is the Prompt Pay Pledge?
The Prompt Pay Pledge asks large companies to commit to providing quicker payment for invoices or enabling private financing solutions, and clearly communicate payment policies and terms to their small business suppliers or vendors. The Pledge encourages large businesses to do their part in ensuring economic success for businesses of all sizes.
More than 21 companies have signed the pledge including Intuit, JPMorgan, AGCO, Select Milk, Citadel, Alpha Technologies, Vistage, and more. See the full list of pledge signers here.
How to Get Involved – Large Businesses
When large businesses pay small business suppliers faster, it strengthens their supply chain by keeping their suppliers healthier. Healthy suppliers can make improvements like faster shipping and better materials and products—benefitting large companies in the long run and avoiding suppliers going bankrupt mid-contract.
If you are a large business the first step to getting involved is signing the pledge! We are building a coalition of companies united by a commitment to support their small suppliers—and we need companies from every industry and region to join us and help spread the word.
Once you sign the pledge, you will get email updates about the latest Prompt Pay Pledge news and events. Every business that signs the pledge will receive:
- A comprehensive Communications Toolkit to share about their commitment
- Recognition in an article featured on the Prompt Pay Pledge landing page
- Opportunities to partner with the U.S. Chamber on editorial and social media content to share their story and relationship with valued suppliers
How to Get Involved – Small Businesses
Small businesses are a key part of the Prompt Pay Initiative. Financially healthy small businesses strengthen local economies in communities across the country, fueling our nation’s broader economic growth. When small businesses have a stable cash flow, they are able to run their business, pay their employees, and plan for future growth.
Small business owners can advocate for fair payment in their communities using this toolkit with sample messages and graphics.
CO— by U.S. Chamber of Commerce is providing educational content and events for small businesses on how to advocate for fair payment terms. Check out these resources and follow CO— for event updates and more small business content.
- How to Set Client Payment Terms (B2C)
- How to Set B2B Customer Payment Terms
- The Pros and Cons of Extending Credit to a Customer
If you are a small business and have a story to share about how you work with your customers on fair payment terms, tell us about it. Contact Lindsay Cates (lcates@uschamber.com) to tell your story.
Why Prompt Payment Is Important
A critical aspect of the U.S. economy is the large business–small business ecosystem: small and big businesses selling each other intermediate inputs, i.e., the goods and services used as inputs in the production process. In fact, trillions of dollars are exchanged between the two each year. Meaning, small business suppliers are a fundamental source of companies’ day-to-day operations, and they, in turn, have their own suppliers and vendors who rely on them.
A point of friction in this ecosystem, especially during periods of rising inflation and interest rates, are extended payment terms when a customer doesn’t pay a supplier for 60 or 90 days or more after being invoiced. This can be especially problematic for small businesses that are forced to finance the costs of goods and services until their customer pays them. Often small businesses are forced to turn to lines of credit or accounts receivable financing to bridge the gap. This becomes even more expensive for the small business as interest rates rise. For example, financing a $100,000 invoice for 90 days at 10% costs a small business an additional $1,708 than financing the same account receivable at a 5% interest rate.
For those who cannot offer faster terms, offering supply-chain financing to vendors allows them to pay their bills later while providing suppliers with faster access to cash. Rising interest rates also drive demand for supply-chain financing programs, as the programs provide suppliers with a relatively cheap source of cash.
Prompt Pay Supporters
Leaders across government and industry recognize the importance of prompt payment and have joined the U.S. Chamber in urging companies to pay their small supplier quicker.
"I'm a strong supporter of small businesses. Small businesses are so important to our economy, innovation, job creation, and they're equally important to large companies. Large companies depend upon a strong economy, which means a strong small business economy. That's why the Prompt Pay Pledge is so important. It's important that large companies help small businesses with their contracts, and with their financing, so that we all can benefit." - U.S. Senator Ben Cardin (D-MD), Chair of the Senate Small Business & Entrepreneurship Committee
“We all know that large businesses at one time started as small businesses. And we need to make sure that those small businesses are able to survive and thrive in our communities. So those large businesses need to make sure they are paying those small businesses quickly and on time.” - U.S. Senator Joni Ernst (R-IA), Ranking Member of the Senate Small Business & Entrepreneurship Committee
"Large corporations pledging to pay their vendors and contractors quicker just makes sense. Black firms already face extreme challenges when it comes to access to capital. When we go to the bank, we receive less than 40% of what we're looking for. And we pay twice the rates of our white counterparts when we do finally get the funds. Now, after doing all the work to ensure that we have the opportunity to participate with private sector contract opportunities, then we're forced to wait up to 90 days, and many times longer, to receive payment.” - Ron Busby, President and CEO, U.S. Black Chambers Inc.
“It is essential to our small business operation that customers pay us promptly in return. We need the support of our larger business customers, and we know that they rely on us. The business community is an ecosystem and small businesses play an essential role in fueling economic growth.” - Natalie Kaddas, President and CEO, Kaddas Enterprises, Inc.; Chair of U.S. Chamber Small Business Council; U.S. Chamber Board of Directors
Contact Tom Sullivan (tsullivan@uschamber.com) if your business or organization would like to help encourage prompt payment.
Ready to Take the Pledge?
Join a coalition of businesses committed to helping small suppliers find economic success.
Prompt Pay Pledge One Pager
About the authors
Thomas M. Sullivan
Thomas M. Sullivan is vice president of small business policy at the U.S. Chamber of Commerce. Working with chambers of commerce and the U.S. Chamber’s nationwide network, Sullivan harnesses the views of small businesses and translates that grassroots power into federal policies that bolster free enterprise and reward entrepreneurship. He runs the U.S.
Jenna Shrove
Jenna Shrove is the Executive Director of Strategic Advocacy and Advisor to the Chief Policy Officer at the U.S. Chamber of Commerce.
