Unpaid Invoices Hold U.S. Small Business Back

Fundbox Team

Fundbox Team

Team at Fundbox
Fundbox is a technology company helping small business owners and freelancers get paid faster. By advancing small businesses for their outstanding invoices, Fundbox gives them back the power to control their cash flow.
Fundbox Team

Fundbox is in the business of helping small business grow by offering short term business financing solutions that are fast, reliable, and transparent. Fundbox technology is based on machine learning that studies the overall business relationships of businesses in the Fundbox Small Business Graph. Fundbox Small Business Graph is essentially an exclusive network of small business in various growth stages.

Growth Stages

Business growth comes in many shapes and forms. Some businesses have just landed their second or third client and may be in need to finance a purchase order or a new contract. Others are getting ready to make their first hire, buy new equipment, refresh their truck fleet, or rent an office space or a warehouse for the first time. Other growing companies are seriously looking to boost their marketing to acquire new customers.

Why can growing be financially challenging?

When you run a small business, you get extremely familiar with the timely cash flow crunch. As many businesses know, closing a deal often requires offering favorable payment terms for your customers.

In many industries, this means offering net 30, net 60, or even net 90 days payment terms. This means a business may be sending out an invoice on the day they close a deal with a new client, but this invoice will not be paid for some 30, 60, or 90 days into the future. This is the key reason for timely cash flow gaps which highlight the difference between cash flow and profitability. Oftentimes, the business has to go out of pocket to finance a deal during this time between the day the invoice was sent and when it is actually paid.

How big is the problem of unpaid invoices for U.S. small businesses?

In short, the problem of unpaid invoices for small businesses in the U.S. is big. It is very big. Fundbox monitors and reports on trends in small business payments status and the size and impact of this problem on the U.S. economy at large to help quantify and solve the problem.

  • The volume of unpaid small business invoices in the U.S. is estimated at 5% of the U.S. GDP. We told you it’s huge.
  • More than 80% of small business invoices are over 30 days past due.
  • The average small business in the U.S. has over $80K in unpaid invoices
  • For more facts read the complete Fundbox Unpaid Invoices Survey

How can we help fix the problem of unpaid invoices to small business?

Unpaid invoices in the small business economy is everybody’s problem. As such, individuals and companies have an opportunity to help fix the problem of debt and unpaid invoices.

On the technological side, companies will continue to develop new ways to give small business owners access to capital and financing resources similar to resources available for larger companies. And on the civilian level, we all can actually have quite a meaningful impact on small business economy if we only pay our bills on time.

So, on the next time that you are sitting on an invoice from one of your independent contractors or small business vendors, remember their pain, and please #PayYourInvoice on time:

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
Fundbox Team

Fundbox Team

Team at Fundbox
Fundbox is a technology company helping small business owners and freelancers get paid faster. By advancing small businesses for their outstanding invoices, Fundbox gives them back the power to control their cash flow.
Fundbox Team

Our Picks

Ready to Grow Your Business?