There are just a few blogs and online news services I track every day. Today I am thinking about a post I read some time ago, an innovative financial services startup that addresses the following problem:
Building a business around online advertising is hard enough without having to combat the cashflow issues created by lengthy payment terms. A survey by industry regulatory body IAB indicates that nearly 80 percent of digital advertising invoices take 60 days or longer to pay. Yes it’s great that Pepsi and Ford want to advertise on your site, or purchase inventory through your ad exchange, but the fact that they want to pay you “net-90” – or after 90 days – could seriously hamper your growth.
The name of the company is FastPay. It strikes me that this is a very modern approach to the factoring model but tuned to the needs of a particular subset of small businesses. I have encountered the net 90-day challenge in other contexts and I know how frustrating, if not crippling, that can be for a small business.
I plan to cover additional announcements like this one from time to time. Please let me know if you have others you’d recommend.