Walmart-owned Sam’s Club revealed last April that it would be entering the small business lending space in a bid to strengthen its ties with suppliers. Business partners would be able to access as much as $350,000 in financing through the new service, which Sam’s Club President and CEO Rosalind Brewer said is not intended to be a revenue generator for the company.
The bulk product seller now seems to be boosting its small business lending arm yet again — this time with the Opportunity Finance Network (OFN), a network of Community Development Financial Institutions (CDFI).
Reports Wednesday (July 15) said Sam’s Club’s Small Business Economic Mobility Initiative has agreed to provide $3.6 million as a grant to the OFN to expand services offered by CDFIs, which include small business loans to business owners in low-income areas.
“We need to do something for small business owners beyond just trying to spur the supply of credit,” said OFN President and CEO Mark Pinsky. “Irresponsible small business lenders are doing serious damage to the companies they lend to.”
While the group has not yet defined exactly what it would do with the funds from Sam’s Club, reports said about half of the OFN’s members lend to SMEs, and Pinsky added that the support will be used to educate small business owners about predatory SME lenders.
“We want to raise public awareness that there’s a Wild West in the small business lending space,” he said, according to Forbes.
The education initiative will reportedly launch in November of this year and follow the OFN’s recently introduced Small Business Finance Collaborative, an effort to boost CDFI lending to small businesses.
Sam’s Club’s grant seems to be yet another sign that the company is funneling efforts into small business lending, even if the company will not get anything in return. The company has also struck partnerships with lending platforms like Lending Club, as well as SmartBiz and the Small Business Administration.
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