BENTONVILLE, Ark. — Sam’s Club said it is testing an online pilot program that would make loans of $5,000 to $25,000 available to those qualifying members.
Sam’s Club said it is testing an online pilot program that would make loans of $5,000 to $25,000 available to those qualifying members.
The program, carried out with Superior Financial Group, a small business administration (SBA) lender, will focus on serving minority, women and veteran-owned small businesses, as well as micro-entrepreneurs.
Club members who apply for a small business loan online during the pilot will receive $100 off the application fee, a 20% discount and a 7.5 APR, which is a 25 basis point discount. The terms of the loans will remain at 10 years. There is no penalty for early repayment. Business memberships cost $35 annually at Sam’s Club.
While the majority of the loans will be delivered online, Sam’s said it will test some in-club communication and other marketing efforts to reach business members and small business owners. The pilot will also complement other offerings that cater to small business including low rate merchant credit card processing, convenient order-ahead programs and early shopping hours.
"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.
In a November 2009 State of Small Business survey conducted by Sam’s Club, nearly 15% of its business members reported being denied a loan to run their operation, up from 12% in April 2009. And according to a survey by the National Federation of Independent Business, only half of small businesses that tried to borrow last year got all or most of what they needed. In the mid-2000s, 90% of businesses said they got the loans they needed.
"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 provide 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."