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 a Small company Administration lender, and Sam’s Club is partnering with them for a trial run in expanding available services to small companies that are Sam’s Club members.
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. Sam’s Club has seen some shrinking revenues but has decided to give this trial program a go, according to the Wall Street Journal. 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.
Boosting membership base
Sam’s Club has had a contraction in revenues. The Costco competitor had to shutter 10 stores just lately. The program would offer more services to small company customers, who make up a significant part of their customer base. Wal-Mart already offers check cashing and VISA Check Cards and has MoneyGram locations in many stores that offer financial services like money orders, payday loans and cash advances.
Will this work out?
This is only slated as a pilot program for Sam’s Club. . It can be quite difficult to pass up a Sam’s Club membership for business owners if it takes off.
Additional info at these websites
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
