Newtek has branded itself the “Small Business Authority” with a goal of using its website to provide content and services that make it the premier destination for small businesses in the U.S. Newtek offers term loans for business financing needs and real estate purchases; Small Business Administration (SBA) loans; and merchant cash advances of future credit and debit card sales. The company also offers loan portfolio underwriting, servicing and closing support for other financial institutions.
Newtek was founded in 1999 and today it has revenue of over $160 and over 100,000 business accounts throughout the U.S. Small businesses can apply for pre-qualification at Newtek’s website, but the application and approval process is handled via phone with a Newtek employee. Newtek also works with “alliance partners” who refer small businesses to Newtek for financing. Newtek’s alliance partners include credit unions such as Navy Federal and Spire and financial companies such as Morgan Stanley and AIG. Benefits of the service include:
Large Loans and Terms
Newtek provides small businesses with term loans from $50,000 to $10 million that are payable with 7 – 25 year amortization schedules. Newtek claims it can offer longer repayment terms than banks, which allows it to lower payments and provide more attractive rates than banks. The company also defines itself as “the nation’s leading non-bank lender, specializing in end-to-end financing solutions for small businesses.”
Variety of Financing
Newtek offers term loans, SBA loans, and other forms of financing, such as real estate loans and accounts receivable financing. For some loans, Newtek can work with businesses even if they are startups or if the business owner(s) have below standard credit ratings.
Additional Small Business Support Services
Newtek doesn’t just offer loans to its business customers. The company also provides services to assist small businesses in becoming successful, including:
- Electronic payment processing
- Website hosting, design, and development
- Insurance for commercial, health, and personal policies
- Payroll management
- Accounts receivables management
- Cloud hosting services
- Internet marketing
- Brand identity
Simplified Application Process
Newtek conducts telephone interviews to determine if your business can be pre-qualified for loans. Newtek’s staff works with businesses to complete a condensed application process and explain what kinds of funding are available. Newtek’s staff can assist their small business customers with creating documentation required to qualify for loans, including preparing business plans
Newtek has been helping small and medium-sized businesses get financing for over 13 years and has over 100,000 business accounts. Barry Sloane, the president, chairman and CEO of Newtek was formerly a managing director of financial services firm Smith Barney and founder and president of consumer loan company Aegis Capital Markets. Newtek’s chief lending officer Peter Downs had over 16 years of small business lending experience with the banking industry before he joined Newtek in 2003.
Newtek provides financing to businesses in a large variety of industries. The company makes it financing options available to U.S. owned and operated businesses in all 50 states.
While Newtek has the ability to help a number of businesses with their funding needs, there are some limitations that need to be addressed as well. Prospective borrowers should consider the following prior to enlisting Newtek’s help:
Limited Online Information
Like many other business lenders, Newtek does not put much information about the cost of its loans on its website. In the section on its website about its multi-purpose term loans, Newtek states, “Interest rates are floating, up to 2.75% over prime”, but it does not list a range of interest rates for that type of funding or any of its other financing options. Newtek also does not list the cost of any origination fees, closing fees, or prepayment penalties. The company does specify it charges a “packaging fee” of between $1,000 – $2,500 for SBA 7(a) loans depending on the amount of the loan.
Unknown Rates and Terms
Newtek claims it can offer attractive rates for its financing options, but does not provide any examples of what interest rates it charges or the cost of any application fees businesses can expect to pay if they get a loan with Newtek. To find out about the fees and terms of the loans available to them, business owners need to go through the application process, but they could benefit from knowing this information in advance of applying for the loans so they can compare the costs of Newtek’s loans to its competitors. In addition to interest rate and fee information, businesses can benefit from having the following information added to the business loans section of Newtek’s website:
- Minimum credit score needed to qualify
- Minimum annual or monthly revenue required
- Collateral required for secured loans
Slow Pre-Qualification Time
Newtek’s pre-qualification process requires business owners to fill out an online form and wait to be contacted by a Newtek employee with a quote or to call the company. Newtek states pre-qualification can take 48 hours, which is much slower than other lenders who have online pre-qualification processes that let businesses know almost immediately if they can qualify for a loan.
*Star Rating is determined by evaluating APR range, minimum credit score requirement, revenue requirement, length in business requirement, and other related approval data.