Sam’s Club Now Has Small Business Loans “In Stock”!
Many of the
small businesses in our area of Arkansas have told us at the ASU SBTDC that they are continuing to experience problems in getting commercial loans for their operations from “traditional” lending sources. This problem is something that is not unique to Northeast and North-Central Arkansas small businesses needing additional financing thanks to current economic conditions. According to a recent survey by the National Federation of Independent Businesses only half of the small businesses who tried to secure a commercial loan last year were approved, leaving the other 50% to search for other options.
BUT… there may be some good news for small businesses looking for “micro loans” between $5,000 and $25,000 via Sam’s Club,the membership discount warehouse division of Walmart Stores, Inc. Just this week Sam’s Club posted an announcement in a press release dated July 6th on their website http://www3.samsclub.cm/NewsRoom/Press/734
Apparently Sam’s Club, acting as an intermediary, has teamed up with the U.S. Small Business Administration to offer “micro-loans” to existing small businesses. Sam’s Club will not be making the actual loan although potential borrowers will apply through them. Instead Sam’s Clubwill partner with Superior Federal Group, a leading SBA lender who will make the actual loan. The loans made will have SBA guaranties using either their “Community Express loan program” or for military veterans the SBA’s “Patriot Express Loan Program“.
While the small business applicant does NOT have to be a Sam’s Club member to apply, membership does provide added benefits including:
- $100 off the loan application fee charged by Superior Financial Group(typically $350-$450 after the discount according to a report in CNNMoney http://money.cnn.com/2010/07/07/smallbusiness/sams_club/
- 0.25% off the market interest rate.
Small businesses that are approved for this micro loan (regardless of whether they are Sam’s Club members or not) will all have:
- 10 Year Terms for Repayment to keep monthly debt service low
- No penalty fo early repayment
- the loan can be structured either as a “Term” or a Revolving Line of Credit
Although any small business can apply, the program is placing special emphasis on:
- Main Street businesses
- Minority businesses
- Women Owned businesses
- Veteran owned small businesses
- Micro-entrepreneurs
At the moment this move by Sam’s Club into the lending arena is a “pilot program” that they will review monthly, so may only be “on the shelf” for a limited amount of time, your local Sam’s Club may not be directly involved, BUT you can apply on-line with them by going to:
- www.samsclub.com
- Click on the Services tab
- then click on SBA Small Business Loans
So what’s in it for Sam’s Club? According to the July 7 article on CNNMoney.com, Sam’s Club test small business loans: “If customers are strapped for cash…they can’t shop” not to mention the $50 referral fee Sam’s Club receives from Superior Financial Group for every approved loan. From Sam’s Club’s standpoint it makes sense as a large part of their business comes from small business owners who are members.
At the present time I have not seen any information about Sam’s or Superior Financial Group’s “eligibility requirements“ but if your small business has been having trouble securing some working capital, needs between $5,000 and $25,000, then this may be a good avenue to pursue! If any of our blog readers out there give Sam’s Cluba shot…. keep us in the loop and let us know how it works out. Or for any small businesses in Northeast or North-Central Arkansas who need assistance in preparing their loan package contact our consultants (Laura Miller or Robert Bahn) for assistance. You can reach the ASU SBTDC consultants at (870) 972-3517 or e-mail asusbtdc@astate.edu
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