Sams Club to start offering online loans
Sam’s Club, a division of Wal-Mart, will start offering online loans through Superior Financial Group LLC. The loans will be for entrepreneurs to start small businesses. Superior Financial Group is one of the leading Small Business Administration loan lenders, and it has partnered up with Sam’s Club on a trial basis to expand services that extend to small business owners that are members of the warehouse retail wing of the Wal-Mart empire.
Wal-Mart finally into banking
Wal-Mart has been looking for a way to get into the banking game. In 2007, Congress blocked non-banking entities, including retailers, from opening banks of their own. 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 available to small business owners that are members with Sam’s Club will range from $5,000 to $25,000, and will carry a term of 10 years at 7.5 percent interest.
Trying to attract greater membership
Sam’s Club has not been performing well as of late. The chain of warehouse retail stores, akin to Costco, recently had to close 10 stores. Small business owners are a significant portion of their customer base, and a business loan program would serve to attract or retain small businesses as customers. Wal-Mart already offers check cashing and VISA Check Cards and has MoneyGram locations in many stores that offer financial services such as money orders, payday loans and cash advances.
Will this pan out for Wal-Mart?
The Sam’s Club online loans will only be a pilot program. The loans in this case will largely be geared towards women, minorities and start up companies, according to Business Week. If Sam’s Club can make a success of this program, it will definitely make it hard for small businesses to pass up a membership.