Sam’s club SBA lending highlights a new trend: fast capital

Sam’s club has begun wearing a new hat; Business lender. They offer business loans through the SBA’s community express program. To be precise, they are not actually making the loans, they have partnered with Superior Financial Group, a leading SBA lender.  This seems like a strange fit for Sam’s club, a large retailer, to be playing financier. But it highlights an important shift in how businesses are demanding money; they want it quick and easy.

That is the essence of the Community Express program that offers smaller loans, from $5,000 to $25,000, and the most streamlined application process among SBA loans. The program aims to fill a key void in small businesses lending by targeting smaller companies that are traditionally underserved by banks.

To be exact, these businesses remain underserved by banks, because Superior Financial Group is a non-bank lender. Banks are currently tight in their lending, especially for small businesses. This is why non-bank financing has become increasingly prevalent in this recession. Small businesses have turned to sources of financing that wont waste time and will approve their funding requests. This means that non traditional lenders have become the essential suppliers of capital while the banks are on the sidelines.

These non traditional lenders come in many forms. Community Express loans are a solid an option in this respect. However businesses that cannot qualify still have alternatives. Asset based lenders provide a range of financial products that can provide much needed access to capital. PO financing, factoring are two asset based financial tools that are generally available to businesses that have been turned down by other lenders. These forms of finance help leverage the credit of a business’s customers. This means businesses can gain access to capital based on their customer’s good standing.

One fundamental problem with PO financing and factoring is that it can only be utilized by businesses that have commercial clients IE B2B companies. However, a merchant cash advance can fill the void for retail businesses and provide much needed access to capital. It essentially borrows against a business’s future credit card sales to provide an immediate lump sum. This is another non bank solution to small business financing.

The moral of the story for small business is to think outside the bank. Alternative lenders will provide quicker and faster capital with less probability of getting turned down thus less wasted time. Truly superior value when compared to a bank.