When stating that something exists you would use "есть" which means "there exists" or "there is".
Instead, this sentence implies that the listener knows about the bag already so you don't need to state that a bag exists, only where it is. Perhaps you're answering the question "Have you seen the bag?" "Yes, the bag is by the table."
Сумка возле стола uses more often than Сумка находится возле стола. But both sentences sound good. Unlike "Сумка есть возле стола" which nobody says. Besides, for Russian speakers Сумка возле стола and Возле стола сумка have almost the same meaning.
To make a bag known without gesturing a hand in its direction, can either the previous context (which we do not have here) or the demonstrative pronoun. Эта (this), for example.
(addition) While re-reading what I wrote, I saw this is not immediately subtle difference.
1) Сумка (where?) возле стола. 2) Возле стола (what?) сумка.
Accordingly, they are translated: 1) The bag is near the table. 2) There is a bag by the table.
The word the in this sentence that is capitalized is the first word in the sentence.
If you are using the word bank feature and there really is no lower case form of the available, then that is simply a programming error. The actual correct answer as displayed on this page has both the lower case and upper case forms.