SAN FRANCISCO, July 11, 2014 /PRNewswire/ — Pacific Gas and Electric Company (PG&E) has pledged to help small business suppliers grow by taking active steps to speed up payments for goods and services and promote better access to financing. The company’s commitment came today as it signed on to a new White House effort known as the Small Business Supplier Financing Initiative. President Barack Obama announced the initiative this morning at a White House meeting which included PG&E Senior Vice President and Chief Customer Officer Helen Burt.
Companies participating in the Small Business Supplier Financing Initiative are committing to help small businesses succeed in three ways:
- Providing a Working Capital Solution to Small Business Suppliers
Companies will take active steps to lower the working capital cost of small business suppliers by paying them faster to reduce their capital needs or facilitating access to financing at a lower cost.
- Sharing Best Practices
Companies will highlight tangible outcomes from their own efforts, provide visibility into their actions and promote key learnings and results.
- Implementing a Win-Win Solution
Companies will carry out this pledge while minimizing new administrative or operational burdens.
“We rely on our partnerships with small businesses to help us provide safe, reliable and affordable energy for our customers,” said PG&E Chairman and CEO Tony Earley. “Small businesses are the economic engines of our service area. Their growth not only helps us be successful, but also creates more local employment opportunities. We’re excited to commit our support for President Obama’s Small Business Supplier Financing Initiative.”
The commitment is the latest step in PG&E’s ongoing efforts to help small businesses and local economies thrive in its service area. Over the past year, the company has created a special economic development rate aimed at helping businesses stay local, continued to provide assistance through its extensive energy efficiency programs and achieved record results in its supplier diversity spending, much of which goes to small and mid-size firms.
“The backbone of our supplier diversity program has been our relationships with small business suppliers,” said PG&E Senior Vice President of Safety and Shared Services Desmond Bell. “Our commitment to promoting a diverse and robust supply chain has made our program one of best in the country. These partnerships have helped us achieve our goals. President Obama’s Small Business Supplier Financing Initiative will help strengthen our supply chain and invigorate the economy.”
An example of a PG&E supplier that stands to benefit from the utility’s new commitment is Agile Sourcing Partners, Inc. – a Southern California-based enterprise with offices in the San Francisco suburb of Benicia. Agile supports utilities, suppliers and manufacturers in the gas and electric industry by providing sourcing and material supply solutions. Agile was founded in 2006 by a Hispanic woman.
“PG&E has understood paying smaller suppliers quickly allows them to operate more efficiently and deliver the best value and service,” said Agile Founder and CEO Maria Bastian Thompson, who accompanied Burt to the White House. “In Agile’s first engagement with PG&E, they extended 15-day payment terms to ensure there was no cash gap with our sub-suppliers. As a result, we hired an administrator to manage the engagement and were able to offer similar payment terms to our 70 sub-suppliers, most of whom are small businesses themselves that also greatly need quick payment for their services.
“The Small Business Supplier Financing Initiative will allow small enterprises to work more autonomously and rely less on traditional mechanisms such as bank loans and lines of credit,” added Thompson. “Alleviating some of the challenges and expenses of gaining access to capital allows small businesses to better serve their large customers.”
PG&E’s commitment to supplier diversity has resulted in an 11-year trend of consecutive year-over-year growth in diverse spending. In 2013, PG&E spent $2.3 billion with diverse suppliers, accounting for 42.1 percent of its total procurement budget and an increase of $265.2 million from 2012.