Getting credit is not always easy for new business owners, but now one very large business, Wal-Mart's Sam's Club division, is working to help members get loans of up to $25,000 through the Small Business Administration.
Catherine Corley, vice president of membership at Sam's, told Dow Jones Newswire, "Access to capital is a major pain point for our members and the small-business Main Street community. We believe this pilot program is a step in the right direction to help fuel small business growth." Roughly 15 percent of Sam's members who own businesses reported not being able to obtain loans in a survey last November.
Sam's isn't directly responsible for handing out loans, but arranges for its members to apply for loans at Superior Financial Group. The club's members get a 20 percent discount on loan fees and there is no collateral requirement.
The loan program is geared to help very small businesses and those owned by minorities, vets, and women.
"It seems like a traditional program done in a unique way," Carl Tobias, Williams professor at the University of Richmond School of Law, told Dow Jones. "It benefits Sam's by potentially adding members and can aid existing members."
Discussion Questions: What do you see as the pros and cons of Sam's involvement in helping club members apply and get SBA loans? Will others follow Sam's lead?