Toilet Paper, Laundry Soap, and a $25K SBA Loan?
Posted on July 5, 2010 by Bill Hansen
While you may have some experience buying paper products, computer equipment, or even insurance for your small business at Sam’s Club, odds are you haven’t tried their newest service: small business lending.
With a lot of the government stimulus programs coming to an end, often without helping the liquidity crisis facing many small and medium sized businesses, retailers like Sam’s (A division of Walmart) are taking it upon themselves to help businesses finance growth. Call it over-the-counter stimulus plans. Sam’s lending service is built upon a standard SBA loan program, though the service streamlines the paperwork and approval process considerably (a significant deterrent for many businesses) and even discounts the loan application.
The program lends from $5,000 to $25,000, unsecured, at a low rate (7.5% at time of publication). Pre-approval is available online in minutes… To date, about 45% of its applicants have been approved.According the New York Times, businesses are using the program to finance vital expansion opportunities. One such example is Michael Golata, a specialty contractor for UPS. Golata services a special niche of medical clients for UPS and when he asked UPS if there was more work available, UPS told him that he should bring on as many drivers as he could afford. The only problem was (you guessed it) capital.
Golata found a used delivery truck for $12,500 that was very road-worthy, even though it had a lot of miles. He tried to get a bank loan, but was denied twice because of the truck’s age. He also looked at a commercial finance loan, but thought the 21% interest rate was both absurd and unafordable. He looked at SBA loans, but felt that the application process for a government loan would be too much trouble.
Then he found the small link on Sam’s Business Services Website. He filled out an online application and by the next day he was approved for a $10,000 loan, at 7.25% for 10 years. His monthly payment was less than $120. Golata immediately bought the delivery vehicle and hired three new drivers. He went from billing $3,000 per week for his own driving to $8,000 per week with the new drivers.
Note: Sam’s Club is not a SBA lender. They partner with Superior Financial Group for the SBA loan program, assumably using their size and customer relationships to secure lower costs on processing, rates, etc than Superior or other firms might otherwise offer.
