President Obama, along with 26 enterprises, this week announced the creation of SupplierPay (#SupplierPay), a “partnership with the private sector that will strengthen America’s small businesses by increasing their working capital.” See: White House Blog, SupplierPay and QuickPay.
The SupplierPay program is a step in the right direction to bridge the working capital divide between the business haves and the have-nots but does nothing to very little for the construction industry’s massive financial risk and payment problems.
Construction financial managers (CFMs) are well-served to understand the program and the working capital trends across America, as the SupplierPay and QuickPay initiatives may just foreshadow the construction industry’s financial future.
The Working Capital Disconnect & Supply Chain Finance Theories
The below TED talk was given by Ami Kassar, a small business advocate and loan broker. The TED talk is 7 minutes long and well-worth watching to get big picture insight on the nation’s working capital conundrum.
Kassar’s insightful point is nicely summed up in his recent Wall Street Journal column “Let’s Put Obama’s SupplierPay on Steroids:”
Big companies can typically borrow money at 2% or 3% interest while in our loan brokerage we find that the small suppliers are often forced…Read More