Sam’s Club, a division of the Wal-Mart corporation, has partnered with Superior Financial Group LLC to offer online loans for its members. The loans are for small business owners and entrepreneurs. Superior Financial Group is one of the leading Small business Administration payday loan company, and it has partnered up with Sam’s Club on a trial basis to expand services that extend to small company owners that are members of the warehouse retail wing of the Wal-Mart empire.
Not Wal-Mart’s first foray into finance
Wal-Mart has been looking for a way to get to the banking game. Congress blocked non-banking entities, such as retailers, from starting their own banks in 2007. As outlined by the Wall Street Journal, Sam’s Club is giving this pilot program a lash after experiencing some shrinking revenue. Sam’s Club members that are small business owners or small company accounts with Sam’s Club can apply for loans from $ 5,000 to $ 25,000, with a 10 year, 7.5 percent interest term.
Trying to attract greater membership
Sam’s Club has been seeing some revenue troubles. The Costco competitor had to shutter 10 stores just lately. A fair amount of their customer base are small companies and small company owners. Wal-Mart already offers some financial services, like check cashing and VISA check cards, as well as MoneyGram locations in stores that offer cash advances, pay day loans, and money orders.
Will this work out?
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 startup companies, as outlined by Business Week. If Sam’s Club can make a success of this program, it will certainly make it hard for small businesses to pass up a membership.
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
