Sam’s Club, part of the Wal-Mart empire, is going to start offering online loans from Superior Financial Group LLC. The loans are for small business owners and entrepreneurs. Superior Financial is a Small business Administration lender, and also the trial program will offer small companies and small company owners that are Sam’s Club members loans as a way to expand services to them.
Not Wal-Mart’s first foray into finance
Wal-Mart has previously tried to get to the banking sector. Congress passed a law in 2007 that blocked non-bank entities from launching banks of their own, including retailers. According to the Wall Street Journal, Sam’s Club has been losing revenue but has decided to give this online loan pilot program a chance. The loans carry a 7.5 percent interest rate for ten years, and small companies or small business owners can apply for $ 5,000 to $ 25,000 if they’re Sam’s Club members.
Trying to attract greater membership
Sam’s Club has been seeing some revenue difficulties. The chain of warehouse retail stores, akin to Costco, most recently had to close 10 stores. A fair amount of their customer base are small businesses and small company owners. Wal-Mart already offers check cashing and VISA Check Cards and has MoneyGram locations in numerous stores that offer financial services like money orders, payday loans and cash advances.
Will this work out?
The Sam’s Club online loans will only be a pilot program. According to Business Week, the loans will be for start up companies, and especially for businesses run by women and minorities. If the program becomes successful, a Sam’s Club business membership will be quite hard to pass up.
Read more on this topic here
online.wsj.com/article/BT-CO-20100706-710011.html
businessweek.com/news/2010-07-06/wal-mart-s-sam-s-club-to-test-online-loans-to-members-update2-.html
