13 November 2024

Sam’s Club Jumps Into Small Business Lending

By Ronald Smith

Is your company in need of funds? Well, why not consider Sam’s Club? The warehouse stores, which are part of Wal-Mart Stores Inc., have recently unveiled a pilot program for small business loans in partnership with Superior Financial Group LLC. Small business owners who are members of Sam’s Club and meet certain criteria can now apply for loans ranging from $5,000 to $25,000 through Superior Financial.

Sam’s Club has specifically designed this program to help diverse small businesses on Main Street, such as minority-, women-, and veteran-owned businesses, as well as micro-entrepreneurs. It seems that Sam’s Club is onto something here. A survey conducted by the company, as reported by Bloomberg Businessweek, revealed that almost 15% of Sam’s Club business members were denied loans in November 2009.

Sam's Club Jumps Into Small Business Lending

Did you know that the percentage of small businesses seeking loans has increased since April? Yeah, it’s true! In fact, back in 2009, only half of those businesses actually received the money they needed. It’s quite a challenge, isn’t it?

But hey, here’s some good news! If you have a Sam’s Club business membership, you have a chance to apply for loans online. All you need to do is pay the $35 annual fee. Sam’s Club has partnered up with Superior Financial Group, a licensed non-bank lender based in Walnut Creek, California.

Now, during the pilot phase, something cool is happening. You’ll get a sweet $100 discount off the application fee! Plus, if you’re approved, you’ll enjoy an annual interest rate of 7.5 percent for a whole 10 years. Awesome, right?

I want to share something exciting with you. Did you know that Superior is one of only 13 nonbank lenders in the country that is approved to make SBA-guaranteed loans? It’s a big deal! They’re so good at it that they were actually the top SBA lender in the entire nation last year. They helped so many businesses by giving out 2,690 SBA loans, totaling a massive $27.1 million. Incredible, right?!

Something interesting happened back in 2007. Wal-Mart, you know, the big retail store, tried to open a bank. But they were stopped by the House of Representatives. They passed laws that said non-financial companies couldn’t have banks. You might be surprised to know that Wal-Mart’s U.S. stores do offer some financial services though, like check cashing.

Now, here’s something to think about. It’s a bit controversial, so brace yourself. It’s pretty wild to think that Wal-Mart, a big retail giant, had dreams of becoming a bank. Some people might even ask, Are they trying to do business with the enemy? It’s definitely something to ponder.

Even though many people think Wal-Mart hurts small businesses by driving them out of town with their low prices, the decision actually makes a lot of sense for Wal-Mart and its divisions. The loans they are offering can help business owners expand their companies, which could increase the demand for products and services that the retailer offers at Sam’s Club.

So, are these loans a good thing? Well, it really depends on whether you’re looking at the long-term or short-term perspective. On one hand, it seems great — like a perfect, easy solution. Who wouldn’t want to give small businesses affordable loans? If you’re struggling to get credit elsewhere, these loans could be a game-changer for you.

But remember, there are limitations when working with a non-bank lender. As a small business with a long-term view, it’s important to build a strong relationship with your banker.

Having a relationship with a local branch of a big bank or a small community bank can benefit your growing business in several ways: they offer products and services that can help you expand your business efficiently and cost-effectively, and they provide personalized advice on financial matters. As Mary Patton, a commercial banker at FirstMerit Bank, puts it: The more your banker knows about your company, the more they can proactively offer solutions and support you in unexpected situations.

As a nonbank lender, Superior Financial at Sam’s Club may not offer all the banking services you need, like checking accounts and electronic funds transfers. These services can be helpful in growing your business and achieving your goals.

If you’re planning for the future of your business, it’s important to build a strong relationship with a full-service bank. They can provide a wide range of benefits beyond just loans. Keep in mind that there’s more to consider than just the loan you may need right now.

Note from the Editor: This article was originally published at OPENForum.com with the title Sam’s Club Getting Into Small Biz Lending. It has been reprinted here with permission.