Existing small-business owners and entrepreneurs with hopes of starting businesses continue to seek access to capital in the form of bank loans, yet are still struggling to land credit. Only half of small businesses that tried to borrow last year got all or most of what they needed, according to [image-nocss] a survey by the National Federation of Independent Business. In the mid-2000s, 90% of businesses said they got the loans they needed.
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.
The Sam's Club small-business loan pilot program is a first-of-its-kind and will complement other offerings that cater to small business including low-rate merchant credit-card processing, convenient order-ahead programs and early shopping hours, the company said.
The Sam's Club small-business loan pilot will focus on serving "Main Street" minority, women and veteran owned small-business owners as well as 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 of membership at Sam's Club.
SFG is one of only 13 approved Small Business Lending Corporations (SBLC) federally regulated by the SBA, and specializes in providing access to credit for Main Street and underserved borrowers. Additionally, SFG offers free online technical assistance and online training courses that specifically target the borrower's weaknesses. The courses include a "how to" 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 of 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."
Sam's Club members who apply for a small-business loan online during the pilot will receive a $100 off the application fee, a 20% discount and a 7.5 APR, which is 25 basis point discount. The terms of the loans will remain at 10 years, which is common to help keep monthly payments low. There is no penalty for early repayment. Business memberships cost $35 annually at Sam's Club.
While the majority of the Sam's Club small-business loan pilot program is to be delivered online, Sam's Club will test some in club communication and other marketing efforts to reach business members and small-business owners.
Superior Financial Group was founded in 2005 to provide access to capital for underserved businesses using SBA express products. SFG is a leading SBA lender in total number of loans and in six of the Minority owned business groups SBA tracks: African American, women owned, Hispanic community, Native American, veteran loans and export loans.
Sam's Club is a division of Wal-Mart Stores Inc., Bentonville, Ark. It serves more than 47 million U.S. members with locations nationwide, as well as in Brazil, China, Mexico and Puerto Rico.
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