Interview: The Sam’s Club Small Business Bailout

The credit crunch isn’t over. Just ask any small business owner looking for a loan, or sole proprietor trying to refinance. In many cases, you just can’t do it.

The Federal Reserve recently found that “lending to small businesses dropped to below $670 billion in Q1 2010, down about $40 billion (5.6%) from two years ago,” according to Consumer Indexes. How are small businesses, which CI says account for 60% of job creation, supposed to steer us out of the recession if they can’t get their hands on any credit?

Some corporations are jumping in to help. One such company is Wal-Mart’s retail warehouse division, Sam’s Club.

Sam’s Club is currently running an online program where small business owner members can receive a $5,000-$25,000 loan. Loans, provided by Superior Financial Group, will focus on minorities, veterans, women, and micro-entrepreneurs (sole proprietors).

We caught up with Sam’s Club Vice President of Member Program Development Catherine Corley to learn more about how the Sam’s Club program works, and who can benefit most from it.

BP: Could you tell me a little bit about what kinds of small businesses use Sam’s Club memberships?

Our small business members are very diverse ranging in size from 50 employees to no employees (sole proprietors). Typically they are less than 5 employees. Their businesses span from Main St mom’n’pop shops, such as convenience stores, restaurants, and other retail stores to small offices, such as real estate offices and auto dealers, churches and daycares. We also see an increase in the amount of individuals working from their home as consultants or in service industries.

BP: Your website says that your pilot program will “focus on serving Main Street minority, women and Veteran owned small business owners as well as micro-entrepreneurs.” Why those populations first? Doesn’t everyone need access to a loan?

Historically, this is been the client base for our third party provider, Superior Financial Group. The Sam’s Club program is open to all of its business members.

BP: What’s the application fee for a Sam’s Club small business loan?

$350 or $450—depending on the size of the loan—is the package processing fee. We do not have an application fee; our fees are only charged if the member is approved for the loan. This reflects a $100 savings off the typical loan packaging fee from Superior Financial Group. Besides the $100 savings, a member of Sam’s Club will also receive a 1/4 percent lower interest rate.

BP: What’s the ideal outcome of your program?

The small businesses who takes advantage of this program will grow and be successful. Their revenues will increase, they will hire employees…and that will help fuel increased spending at Sam’s Club for their business and personal needs! One of our members who received this loan was able to hire three employees and grow his revenues 25 times. We have currently received more than 1,000 loan applications, and more than 40% of applicants have received funding.

BP: Any other remarks?

The process is fast and simple. It’s all online, and you are notified of pre-approval in a matter of minutes, with final approval within 24-hours. If approved, the funds are dispersed in three to 10 business days. Go to samsclub.com and click on the Services tab for more details.

Catherine Corley’s official bio:

Catherine Corley is currently Vice President of Member Program Development at Sam’s Club, a $40bn+ division of the world’s largest retailer, Wal-Mart, Inc. With over 20 years experience, she brings a unique blend of strategy, marketing and financial expertise to her role of ensuring Sam’s Club is meeting the needs of their members by developing simple, relevant member benefits. Prior to joining Sam’s Club, Catherine worked for Tyson Foods, Inc holding VP roles in strategic planning and foodservice marketing.