New Business Financing
A reader recently called my attention to a small business loan program offered through Sam’s Club. Sam’s Club is not a lender, but they are working through Superior Financial Group, the largest Small Business Administration (SBA) lender in the U.S. (number of loans).
Superior Financial Group makes small business loans that are guaranteed through the SBA. They loan amounts from $5,000 to $25,000, with interest rates as low as 4.25% over the Wall Street Journal published prime rate. The current interest rate starts at 7.50% and increases slightly with smaller loan amounts.
To qualify for this lending program, you need to meet the following criteria:
- Your business can be either a startup or already operating, but it must have a business checking account and a good credit standing. A nice feature of these programs is that no collateral is required.
- You also must have a good personal credit standing.
- You must be a member of Sam’s Club (to receive the low interest rate and loan fee discount).
- You must need a minimum of $5,000, and a maximum of $25,000 for operating capital for your business.
- You must be a “for profit” business.
To investigate this loan program further, go to the Sam’s Club web site and click on “Services”, then on SBA Small Business Loans. Follow the instructions and apply online, or by phone. The lender will process your request quickly and you will hear back within a day or two. Good luck!
The SBA guarantees these small loans through the Patriot Express and Community Express (”Community Reinvestment Act”) programs. You can learn more about these, and other, SBA loan programs through this special report.
In the event an SBA loan does not work out for you, there are other small business financing options—check out this report on Creative Business Financing. There are many ways to finance a business…it just takes creativity and perseverance.
In fact, if you have enough passion and perseverance, you could even Bootstrap your business. Be aware however, that this method only works for the highly determined person who can discipline themselves through the process. Here is a report on a typical scenario for Bootstrapping.
I would be interested in hearing from anyone who has obtained a business loan other than through a bank.
*
Business Funds for Veterans
Sadly, veteran owned businesses are at an all-time low. Fifteen years ago veterans owned around 20 percent of all small businesses, but today that number has dwindled to about 12 percent. Consequently, the U.S. Congress, through the SBA, has approved several programs to help veterans become entrepreneurs.
Here are three of the most popular:
- Patriot Express Pilot Loan—This program is for all veterans and active-duty military people, including their spouses. However, this is a SBA “guaranteed” loan, which means the loan is made through a bank—thus requiring that you have a good credit history. Vets can borrow up to $500,000 with 85 percent of their loan guaranteed by the SBA. And since it is an “Express” loan, you will know within one day if you are approved. For more information, call your local SBA office or visit http://www.sba.gov/vets
- Military Reservist Economic Injury Disaster Loan—This special loan is for the small business that has a key employee, or the owner, called up for active duty. The concept is to loan the business additional operating money to help it either get through the period of absence, or recover from the temporary loss of a key individual. You have a year after the return of the key employee to apply for the loan, or you can apply immediately upon the notice of call-up (a good idea if it is the business owner). For more information, call your local SBA office or visit http://www.sba.gov/vets
- Veterans Transition Franchise Initiative—This is not a loan program; it is a government-sponsored program that gives ten to 20 percent off franchise fees at almost 400 different franchising companies. This program works well for the vet who either has the additional money, or can raise it, to cover the remainder of the franchise fee, plus any operating capital requirements, and who prefers to work within the structured franchise model. For more information, visit http://www.vetfran.com
These are special programs set up to help veterans returning from active duty, or while on active duty, so don’t hesitate to take advantage of them if entrepreneurship is in your future.
My Book
Any business crisis can be managed before it becomes fatal . . . Be Your Own Turnaround Manager tells you how. Click here for more information.