Sam’s Club invests in future customers
BENTONVILLE, Ark. — Sam’s Club is celebrating National Small Business Week in a very big way.
The retailer is launching the Small Business Economic Mobility initiative, a five-year investment in small business growth through increased access to capital and borrower education, with grants totaling $13.6 million to eight national nonprofits.
"Our founder Sam Walton started Sam’s Club to help small businesses get access to big business savings, save money and grow their businesses as a result,” said Rosalind Brewer, president and CEO of Sam’s Club. “Through this philanthropic investment, our founders’ legacy is carried forward by fortifying our communities’ lending resources to increase access to capital and borrower education for small business owners. In collaboration with dedicated nonprofits, we are proud to open doors for small business and strengthen the backbone of the U.S. economy.”
Through further investments in small business advocacy and nonprofit organizations, the five-year initiative will:
• Enable nonprofit Community Development Financial Institutions (CDFI’s) to make 5,000 loans to underserved small businesses with focus on women-, minority- and veteran-owned businesses with fewer than 20 employees
• Unlock $100 million in new capital from non-bank, community lending resources to low- and moderate- income small business owners through 2019
• Support 28,000 jobs in the small business community
• Reach one million underserved small business owners with education on responsible lending and better borrower practices.
Across the country, small businesses and entrepreneurs report that access to capital is a major barrier to growth. According to the State of Small Business Lendingreport published by Harvard Business School fellow and former SBA Administrator Karen Mills, the share of small business loans provided by banks 20 years ago was about 50 percent, compared to only 30 percent in 2012.
Specifically, minority owned businesses typically encounter higher borrowing costs, receive smaller loans and see their loan applications rejected more often by banks, according to a Minority Entrepreneurship Report published by UC-Berkeley and Wayne State University. CDFIs, non-profit mission-driven lenders, specialize in helping those businesses attain affordable loans bundled with education. The Small Business Economic Mobility initiative helps CDFIs to scale loans and reach more underserved business owners more broadly.
“Economic projections indicate that in the future a growing number of Americans will be working for themselves,” said Joyce Klein, Director of the Aspen Institute Microenterprise Fund for Innovation and Effectiveness, Learning and Dissemination. “The for-profit and nonprofits that can provide capital and resources for this segment seek to leverage technology to lower their costs and embrace new partnerships in order to compete and to better serve this growing market. The Sam’s Club Giving Program is a welcome new funder and contributor to the national conversation about how to advance this diverse entrepreneurial community and to meet their needs for capital and knowledge to build their businesses.”
The Sam’s Club Giving Program’s Small Business Economic Mobility initiative will also give the Opportunity Finance Network a $3.6 million grant to raise awareness about predatory lending and educate small business borrowers.
The Sam’s Club Giving Program’s Small Business Economic Mobility initiative is part of the Walmart Foundation’s focus on creating economic opportunities for individuals globally.