Frustrated over the lack of cash to run your business? Many existing small business owners and aspiring entrepreneurs seeking to access capital in the form of bank loans are running out of patience by the inability to land credit. Only half of small businesses that tried to borrow last year got all or most of what they needed, according to a survey by the National Federation of Independent Business. In the mid-2000s, 90% of businesses said they got the loans they needed.
Now, if you are on Twitter, it is probably not news to you (they have been tweeting about it since its introduction) that Sam’s Club recently announced it is testing an online program with Superior Financial Group (SFG), the Nation’s leading Small Business Administration (SBA) lender, to make $5,000 to $25,000 loans available to qualifying members. The initiative, aimed at supporting small business as well as its small business members, was launched after a survey in 2009 revealed that nearly 15 percent of Sam’s Club’s business members reported being denied a loan to run their operation. This statistic is up from 12% in April 2009.
The Sam’s Club small business loan program complements other offerings for small businesses including low rate merchant credit card processing, convenient order-ahead programs and early shopping hours. This will be the first small business loan program offered by Sam’s Club.
The small business loan program offered by Sam’s Club targets Main Street minority, women and Veteran owned small business owners and micro-entrepreneurs under the SBA’s Premier Outreach Express products such as Community Express, Patriot Express and Export Express loans.
“Access to capital is a major pain point for our members and the small business Main Street community. We believe this pilot program is a step in the right direction to help fuel small business growth and create jobs to stimulate our economy. It’s also simple to apply and costs less, which is consistent with our goal to help our members make smart choices and provide superior value,” said Catherine Corley, vice president, Membership at Sam’s Club.
There are only 13 Small Business Lending in Corporations (SBLC) that are approved and federally regulated by the SBA. SFG, which specializes in providing access to credit for Main Street and underserved borrowers, is one of them. SFG also offers free online technical assistance and online training courses specifically designed to shore up the borrower’s weaknesses. They include “how to” instructions on writing a business plan, complete with a business plan writing template.
“All Lenders are trying to make an impact on Main Street, which includes minorities, women and veterans to help create jobs. Main Street, however remains the most difficult underserved market to reach”, said Tim Jochner, CEO Superior Financial Group. “Sam’s Club together with SBA’s premier outreach express loan programs provides both a unique and powerful opportunity to reach and provide capital along with technical assistance and training to increase successful penetration into this underserved space.”
A special offer by Sam’s Club for members who apply for a small business loan online during the pilot is $100 off the application fee, a 20 percent discount and a 7.5 APR, which is a 25 basis point discount. Loan terms will remain at 10 years, which is common to help keep monthly payments low. Best of all, there is no penalty for early repayment. Sam’s Club memberships typically run $35 annually.
Sam’s Club small business loan pilot program is anticipated to be delivered online. However, Sam’s Club is planning on testing some in club communication and other marketing efforts to reach business members and small business owners. For more information visit samsclub.com and click on the services tab.
For more information about Sam’s Club SBA Loan Program, view their Q&A page and download their brochure. If you are already a member of Sam’s Club, you can even apply online.
If you would like to contact me, you can do so by visiting my LinkedIn page or emailing me at mike.clough@bestbizpractices.org.
Posted by: Mike Clough
