Purpose
Due to the unprecedented economic recession, Illinois has experienced lower than expected revenues which has led to a delayed payment cycle. In many cases, vendors and service providers are waiting several months to receive payment for goods and services provided to the state. The State of Illinois Vendor Payment Program is intended to provide relief to those vendors and service providers.
Who Is Eligible
Vendors who qualify for Prompt Payment Penalty because they have invoices at least 90 days past due are eligible for the program. State vendors who qualify range from small private contractors to larger entities such as nonprofit groups. (Note: Medicaid invoices are not eligible for the program.)
How the Program Works
An eligible vendor agrees to sell outstanding receivables to a qualified purchaser. After outstanding vouchers are verified through a pre-audit process, the qualified purchaser will pay 100 percent of the vendor’s underlying invoice amount, and, in exchange, the vendor assigns all rights to payment of the vouchers, including any prompt payment penalties, to the purchaser. Ninety percent of the invoice amount will be paid directly to the vendor; 10 percent will be held in an custodial account. Once the state has fully paid both the account receivable and the associated prompt payment penalty, the vendor, subject to any required offsets or other state contractual rights, will receive the remaining 10 percent.
STEP 1
Vendor applies online and requests sale of receivable to purchaser. Vendor assigns rights to receivables and prompt payment penalties to purchaser.
STEP 2
Purchaser verifies validity of vouchers. Once verified, purchaser pays vendor 90% of the invoice amount. 10% remains in the custodial account.
STEP 3
State pays vouchers amount to qualified purchaser. Purchaser releases custodial funds (less offsets) to the vendor.
For details and definitions of terms, see our term sheet and our vendor assignment.
For investors who are interested in participating as a purchaser, please see the documents below:
Contact Us
Donald Lynch
Vendor Payment Coordinator
James R. Thompson Center
100 W. Randolph St., Suite 4-500
Chicago, IL 60601
donald.lynch@illinois.gov
312-814-1583
Vendor Payment Program
To apply, please visit one of our participating purchasers:
We are working to improve this process, and we thank you for your patience.