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 company 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
This is not Wal-Mart’s first attempt at a foray into banking. 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 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.
Boosting membership base
Sam’s Club has not been performing well as of late. The Costco competitor had to shutter 10 stores recently. The program would offer more services to small business customers, who make up a significant part of their customer base. Wal-Mart already offers some financial services, like check cashing and VISA check cards, also as MoneyGram locations in stores that offer cash advances, payday loans, and money orders.
Is this the start of a beautiful friendship?
The Sam’s Club online payday loans will only be a pilot program. The loans, according to Business Week, will mostly be offered to women, minorities, and start up companies. It will be quite difficult to pass up a Sam’s Club membership for business owners if it takes off.
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
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