New Small Business Loans — from Sam’s Club?

New Small Business Loans — from Sam’s Club?

You heard me tell you this before:

Image: SustainabilityNinja.com

All the economists say that small businesses must lead us out of this stalled economy by creating the new jobs that we need.

This obviously isn’t happening, since only 83,000 private sector new jobs were created last month in the entire country. (See Brad Warthen’s tidy July 1, 2010 post on Sheheen and Haley’s views on removing (or not) the Confederate battle flag from the State House grounds in an effort to “develop an environment that creates jobs.”)

A Drop in Gov’t-Backed Business Loans
If we want small businesses to grow and start hiring, we need to make sure that they can get the loans or credit lines they need to do that. One of those ways is to encourage private financial institutions to make more U.S. Small Business Administration (SBA) loans, loans largely backed by the federal government.

Unfortunately, since May, Congress has not reallocated stimulus money to the SBA loan programs that temporarily eliminated fees for these loans and increased the government guarantee up to 90 percent. As a result, the number of traditional SBA loans dropped significantly last month. (And this isn’t a new phenomenon.)

A Break in the Clouds: The Community Express Loan Program
But there is good news. The SBA also has a Community Express loan program in which small businesses can more easily obtain loans from $5000 to possibly $50,000. The process is relatively easy and can be done online. There has not been a drop-off in these loans.

The problem is that awareness of the Community Express loan program is not what it should be.

So you have to hand it to big box stores. They’re always looking for an angle to get shoppers in the door or online. Usually the losers in their effective marketing schemes are the local small businesses. You might be saving a dollar on your purchase, but most of the money you fork over flows right out of your community.

You’re selling your local economy’s soul for a few pieces of gold.

Finally, one of those big box stores has found the SBA Community Express loan program and has a good idea that can actually help local small businesses.

The Retail Giant with a Heart of Gold?
Sam’s Club will soon launch a program to market the Community Express loans to all its members. To do this they’re partnering with Superior Financial Group, which is one of the two authorized SBA lenders actually making these loans (the big banks are also authorized, but they aren’t making the loans because they are too small and not very profitable.)

Obviously, Sam’s Club isn’t doing this out of the goodness of its heart. First, Sam’s Club will reportedly keep $50 from each loan. Second, it’s a marketing gimmick. You go to the Sam’s Club website, fill out the application and, the retailer hopes, you stay on the website and spend some money. Sam’s Club doesn’t really care if you get the loan or not. The $50 is just a bonus.

Still, Hats Off to Sam’s Club
Many small businesses that could use a loan to expand or just get them over a hump have no idea that Community Express loans exist. The SBA and other SBA lenders don’t have the marketing budget and reach of Sam’s Club. The giant retailer can’t guarantee that a small business will qualify for the loan, but through its marketing clout more small businesses will be aware of the program.

A Good Alternative to Fueling the Sam Walton Empire
However if you’re like me and don’t want to give Sam’s Club $50, you can apply for a Community Express loan online from Borrego Springs Bank. Call them at 866-644-0042 or go to to their website. There is no application fee, although they do have a package fee if you get the loan.

I’m sure that Borrego Springs Bank will be happy to match whatever discount you might think you’re getting through Sam’s Club. You should receive a response in about two days.