Net-60 Payment Terms Can Squeeze Black-Owned Suppliers

For a Black-owned B2B supplier, a major contract can bring revenue, visibility and a path to larger customers.

Then the payment clock starts.

If the buyer pays in 30, 60 or 90 days, the supplier may have to fund the work long before cash arrives. Payroll, contractors, software, inventory, freight, insurance, compliance costs and vendor portals do not wait for receivables. In practical terms, net-60 payment terms can turn a smaller supplier into a short-term lender to a larger customer.

The problem is not always late payment. The deeper issue is that the contract itself can require a smaller company to carry the cash-flow burden until the buyer pays.

That is why payment terms belong in the [supplier diversity](/supplier-diversity/) conversation, not just in procurement paperwork.

A Black-owned media-tech example

Culture Genesis offers a useful example outside the familiar retail shelf-placement story. In a public client story, NOW, a company that offers invoice-payment acceleration, describes Culture Genesis as a Black-owned media-technology company that works with major ad agencies and Fortune 500 advertisers (NOW client story ↗).

YouTube’s services directory identifies Cedric J. Rogers as Culture Genesis’ co-founder and CEO and describes the company as a media-tech business focused on helping multicultural publishers and creators monetize content (YouTube Services Directory ↗).

According to NOW, Culture Genesis began using its product in 2021 to fund net-30 and net-60 invoices. NOW also says Culture Genesis processes $10 million in annual invoice volume through the platform and doubled revenue in one year after using the product.

Those figures come from a vendor case study, not audited financial statements. They should be treated as NOW’s claims unless Culture Genesis confirms them directly. The case also should not be read as proof that receivables acceleration caused the company’s revenue growth. Still, it illustrates the mechanics: a Black-owned B2B company with large customers used invoice-payment acceleration to bridge the time between invoicing and payment.

A net-60 invoice can represent revenue already earned, but it cannot pay this Friday’s payroll unless the company has enough cash, credit or financing.

Payment terms are trade credit

Corporate payment terms often appear in contracts as routine administrative language. Net-30 means payment is due 30 days after a qualifying invoice. Net-60 stretches that to 60 days. Contracts can also define what counts as a valid invoice, when an invoice is approved and how disputes affect the payment timeline.

Finance researchers describe this as trade credit: the supplier provides temporary financing to the customer buying the product or service. A 2024 Journal of Financial Economics paper, “Discrimination in the payments chain,” examines payment delays in trade-credit relationships and how those delays may vary under financial stress (ScienceDirect ↗).

The cash math is straightforward. A supplier that invoices $100,000 on net-60 but must spend cash to deliver the work needs to finance that gap for two months. A company with a large credit line may absorb the delay. A smaller firm may have to use credit cards, owner cash, factoring, invoice acceleration, purchase-order financing or a short-term loan. Depending on the product, those tools may carry fees, discounts or interest.

The Federal Reserve’s 2025 Small Business Credit Survey found that paying operating expenses and uneven cash flows were among the top financial challenges for small employer firms (Federal Reserve Small Business Credit Survey ↗). Federal Reserve survey reports have also documented financing gaps by owner race, including lower rates of full financing approval for Black-owned firms compared with white-owned firms in prior survey years (Federal Reserve Small Business Credit Survey ↗).

That context matters when a contract requires a supplier to front costs for 60 days or longer. For founders weighing [Black-owned business financing](/black-owned-business-financing/), the best contract is not always the largest one. It is the one whose payment structure the company can actually carry.

Why the issue matters for Black suppliers

The Census Bureau’s 2023 Annual Business Survey, covering reference year 2022, estimated 194,585 Black or African American-owned employer businesses, with $211.8 billion in annual receipts, 1.6 million employees and $61.2 billion in payroll (U.S. Census Bureau ↗).

That is a meaningful employer base. But revenue growth does not automatically solve cash-flow strain. A company can book more sales and still feel squeezed if its biggest invoices take 60 days or more to convert into cash.

The Minority Business Development Agency’s 2024 U.S. Supply Chain Report also shows how small the Black-owned employer-firm base remains in some selected advanced manufacturing groups. The report counted 110 Black firms across those selected groups, compared with 523 Hispanic firms and 1,628 Asian firms (MBDA ↗).

Payment terms also appear as a difficult contract issue in some supplier-diversity discussions. In one Have Her Back survey of small business leaders entering master services agreements with larger companies, respondents ranked payment terms among the most important terms to make fair and reasonable and among the hardest to negotiate. Among minority-owned businesses in that survey, payment terms appeared in the top-five list of difficult-to-negotiate provisions (Have Her Back ↗). The survey is not government data, but it shows why some suppliers treat payment timing as a core contract issue.

The Journal of Financial Economics paper also points to the need for closer scrutiny of payment chains during periods of stress. The study does not prove that every Black-owned supplier receives worse treatment, and it does not establish wrongdoing by any named buyer.

Faster payment can be policy

Some large buyers have addressed payment speed through early-payment programs or special terms for small and diverse suppliers.

Walmart announced in 2021 that it expanded an early-payment program for qualified diverse or minority-owned suppliers through C2FO. The company said current and potential diverse suppliers had identified access to working capital as the biggest challenge to growth (Walmart ↗).

The University of Pennsylvania introduced an “immediate pay” pilot for about 1,000 diverse and local small-business suppliers, citing cash-flow and cost-of-money barriers (University of Pennsylvania Almanac ↗). Salesforce said in a 2020 Australia news update that its Accelerated Pay Program shortened payment lead time from 60 days to 15 days for small businesses (Salesforce ↗).

Those examples show payment speed can be adjusted. Net-60 is not a law of commerce. It is a business policy shaped by procurement processes, treasury priorities and working-capital goals.

Supplier finance has become significant enough to draw accounting disclosure requirements. In 2022, the Financial Accounting Standards Board issued ASU 2022-04, which requires companies that use supplier-finance programs to disclose information about key terms and obligations confirmed as valid to finance providers or intermediaries (FASB ↗).

The federal government has long recognized prompt payment as a policy concern. Congress passed the Prompt Payment Act in 1982, and the U.S. Treasury says the law requires federal agencies to pay bills on time and pay interest penalties when late (Treasury Bureau of the Fiscal Service ↗). Federal acquisition rules also set an accelerated-payment policy with a 15-day goal for small business contractors and for prime contractors that agree to accelerate payments to small-business subcontractors, while noting that the rule does not create new Prompt Payment Act rights (Acquisition.gov ↗). That makes payment timing especially relevant for Black firms pursuing [government contracting](/government-contracting/).

What buyers and suppliers should track

Supplier diversity cannot stop at spend totals. Spend alone does not show whether suppliers received terms that helped them grow profitably.

Buyers have practical options. They can offer net-15 terms to small and diverse suppliers. They can use immediate pay for approved invoices. They can allow deposits, progress payments or milestone billing for service contracts. They can create no-cost early-payment programs instead of requiring suppliers to accept discounts. They can track actual days to pay, rejected invoices, portal delays and discount costs by supplier size and certification.

Suppliers should protect themselves before signing. They should ask when the payment clock starts, what makes an invoice “approved,” how quickly disputes must be raised, whether portal errors pause payment and what early-pay options cost. A contract that looks profitable on paper can strain cash if the buyer’s process pushes payment far beyond the delivery date.

Receivables acceleration, the tool described in NOW’s Culture Genesis case study, can support growth when the margin supports the cost. Other suppliers may use bank lines, CDFIs, purchase-order financing, customer deposits or customer diversification.

But financing should not distract from the buyer’s role. When a large company places net-60 terms on a small supplier, it can shift part of its working-capital burden onto a firm with fewer ways to absorb the wait. If faster payment requires a fee or discount, the supplier can end up paying to shorten a delay built into the original contract.

The next phase of supplier diversity should measure what happens after the contract is signed. Payment speed belongs in that scorecard. So do invoice rejections, dispute resolution, early-pay costs and the share of small suppliers on net-15 or immediate-pay terms.

The purchase order may open the door. The payment term determines how expensive it is to enter.