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FW: Sam's Club microlending

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  • Glenn Brown
    From: bounce-6084578-8121152@list.cornell.edu [mailto:bounce-6084578-8121152@list.cornell.edu] On Behalf Of Development Sent: Tuesday, July 06, 2010 9:42 AM
    Message 1 of 1 , Jul 6, 2010
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      From: bounce-6084578-8121152@... [mailto:bounce-6084578-8121152@...] On Behalf Of Development
      Sent: Tuesday, July 06, 2010 9:42 AM
      To: communitydevelopmentbanking-l@...
      Subject: Sam's Club microlending


      Sam's Club will offer small-business loans

      Program will focus on minority-, women- and veteran-owned businesses

      BENTONVILLE, Ark. — Sam's Club said Tuesday it will offer small business loans of up to $25,000 to its small business members.

      The division of Wal-Mart Stores Inc., which is based in Bentonville, Ark., is testing a program with Superior Financial Group, one of 13 federally licensed nonbank lenders, and will offer $5,000 to $25,000 loans to members who qualify.

      Sam's Club says 15 percent of its business members reported they were denied a loan in a November survey. That's up from 12 percent in April 2009.

      The program will focus on minority-, women- and veteran-owned businesses.

      Sam's Club members who apply for a small business loan during the pilot will receive $100 off the application fee, a 20 percent discount and a discount on interest rates.

      Businesses can pay $35 for a membership to Sam's Club that includes three annual membership cards that allow them to shop at 600 Sam's Clubs in the U.S. Sam's Club offers other memberships to consumers and businesses that cost as much as $100 annually depending on the features included.

      Although the economy has grown for three straight quarters, tight credit remains a problem for many consumers and businesses.

      "Access to capital is a major pain point for our members," said Catherine Corley, vice president, membership at Sam's Club.

      Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.



      MacDonald Stacks

      Development Department

      Community First Fund

      PO Box 524

      Lancaster, PA  17608

      717 393-2351, ext 103


      P Please consider the environment before printing this email



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      From: bounce-6069980-12716141@... [mailto:bounce-6069980-12716141@...] On Behalf Of Leslie Belay
      Sent: Monday, June 28, 2010 1:37 PM
      To: communitydevelopmentbanking-l@...
      Subject: Collateral and limiting exposure on micro-loans


      Greetings –


      I am working with a small micro-lender in the Northeast that is reviewing its loan approval guidelines. Historically, the fund has secured loans (up to $35,000) by accepting personal and business assets as collateral. Unfortunately, during this recent economic downturn, the organization learned just how limited this collateral really is – if a borrower defaulted and the loan was sent to a collections agency, the lender was likely to receive no more than 30 cents on the dollar, and often less than that. Traditional collateral, such as a car, equipment, house, or other business assets, are just not practical for a small non-profit lender to repossess and resell.


      So, my question is, do you (small CDFI micro-lender) use personal and business assets as collateral? Beyond the symbolism, how valuable is such collateral when a business goes into default? Do you have a policy about limiting exposure when using such collateral?


      Other related questions: If you don’t use business or personal assets as collateral, do you rely on a co-signer? A third party guarantor (city agency or other lender)? Do you engage in purely “character” lending?


      We would like to come up with meaningful policies and procedures for establishing collateral requirements and would like to know what others are doing and, most importantly, what works best?


      Thanks, and please reply directly to me,



      Leslie Belay, Non-Profit Management Consultant

      43 Peter Parley Road

      Jamaica Plain, MA 02130



      617/460-5417 (mobile)


      CDB list instructions http://www.runonthebank.net/cdblist.htm

      CDB list instructions http://www.runonthebank.net/cdblist.htm

      CDB list instructions http://www.runonthebank.net/cdblist.htm

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