SmartBiz was founded in 2013 with the goal of streamlining the Small Business Administration (SBA) loan application process to make the process faster and more efficient for businesses and more cost effective for banks. The company currently works with Golden Pacific Bank to provide businesses with an online application that lets them pre-qualify for SBA loans in as short five minutes. Businesses can obtain SBA loans from $5,000 to $350,000 with 10-year terms and interest rates of 6% to 8%.
SmartBiz provides access to SBA loans in varying amounts that businesses can use for working capital, debt refinancing, real estate purchases, and business acquisition. With 10-year term rates, these loans offer small companies an affordable option to maintain or grow their businesses. Although only in operation a short time, SmartBiz has had success and claims it is the “#1 marketplace for online SBA loan originations.” Benefits of the SmartBiz platform include:
SBA loans obtained through SmartBiz have a 7-9% APR compared to loans from cash advance lenders whose APRs can range from 20-100%, making a SmartBiz SBA loan substantially more cost effective than loans from many other lenders.
Automated Application Process with Fast Approval
SmartBiz’s online application reduces the amount of paperwork companies have to provide and decreases the amount of time it takes to apply for a loan backed by the SBA. With SmartBiz’s application, you can pre-qualify online in as little as five minutes. SmartBiz states most loan applications take a couple of weeks, although loans for over $150,000 may take longer. The company claims the streamlined process it has created, which can often be completed solely online, has also increased its customers’ approval rate for SBA loans, and SmartBiz assigns customers a personal loan consultant to assist them with the process. Once approved, SmartBiz claims companies can receive their funds in as little as seven days.
Long Re-payment Terms
With 10-year repayment terms, businesses can get lower monthly rates on the cash they borrow.
Transparent Fee Structure
SmartBiz charges a one-time referral fee of 2% of the loan amount and a one-time packaging fee of 2%. For loans $151,000 and higher, there is also a 2.25% guarantee fee paid to the SBA. SmartBiz said most bank closing costs for the loans typically cost $317 although the closing fees may vary depending on third party report charges.
Venture Capital Support and Partnerships with Industry Leaders
SmartBiz is a brand of Better Finance, Inc., which has received funding from venture capital firms including Investor Growth Capital, Venrock, First Round Capital, Baseline Ventures, and Bronze Investments. SmartBiz has aligned itself with distribution partners to increase its outreach to businesses in need of SBA loans. Distribution partners for SmartBiz’s services include Yahoo!, ePay, Xero, California Business Bank, and Sam’s Club.
SmartBiz Supports the Small Business Borrower’s Bill of Rights
Created by the Responsible Business Lending Coalition, the Small Business Borrower’s Bill of Rights includes the following:
- The Right to Transparent Pricing and Terms: This includes clear explanation of the terms of the loan and no hidden fees.
- The Right to Non-abusive Products: This right prevents customers from getting caught in “debt traps” where they have to keep borrowing to pay off the existing loan, and bans “double dipping” on existing principal when a loan is refinanced and prepayment penalties.
- The Right to Responsible Underwriting: Lenders should only lend money to borrowers when they are confident the borrowers can repay the debt without defaulting on the loan or having to borrow more to cover the debt.
- The Right to Fair Treatment from Brokers: Brokers should provide transparent information about loan options, their fees, and disclose any conflicts of interest. Brokers should also not charge clients if they are unable to find them a loan.
- The Right to Inclusive Credit Access: No discrimination based on race, color, religion, national origin, sex, marital status, age, sexual orientation or identity, or any other protected class.
- The Right to Fair Collection Practices: Borrowers should be treated “fairly and respectfully” in any debt collection efforts.
Not all businesses will qualify for the low-interest SBA loans that are the primary market for SmartBiz. Business owners must be U.S. citizens or legal permanent residents of the U.S. who are at least 21 years old and have a good personal credit score and no criminal record other than minor motor vehicle violations. Business owners must have no bankruptcies or foreclosures in the past three years. Businesses must have been in operation for over two years, have no outstanding tax liens, no recent charge-offs or settlements, and be current on all government-related loans.
In addition, companies in the following industries are not eligible for SBA loans through SmartBiz:
- Life Insurance
- Religious Teaching
- Political and Lobbying Activities
- Oil Wildcatting
- Mortgage Services
- Real Estate Development
- Bail Bond
- Pawn Shops
- Private Clubs
Here are areas where we think SmartBiz can improve its services:
Limited Track Record
The company has only been offering support for loans since 2013, so it does not have a lengthy track record of securing loans. SmartBiz also does not reveal on its website the number of clients it has assisted in obtaining loans, the total dollar value of these loans, or the number of clients it has been unable to help. Sharing data about how many businesses received loans through SmartBiz, the types of loans they received, and the percentage of clients it was unable to help would assist businesses in determining if SmartBiz was a good choice for their loan applications.
Heavy Focus on SBA Loans
Although SmartBiz states on its website that it can assist clients with obtaining other types of loans if they are turned down for an SBA loan, it does not provide any information on the other types of loans available or what non-SBA lenders it works with. The company’s strong focus on SBA loans may limit its usefulness for larger companies or companies that otherwise do not qualify for that type of loan.
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*Star Rating is determined by evaluating APR range, minimum credit score requirement, revenue requirement, length in business requirement, and other related approval data.
U.S. businesses owned by U.S. citizens or legal permanent residents may apply for SBA loans through SmartBiz’s online application. Businesses must provide documentation showing that they have been in business over two years and have sufficient cash flow to make the loan payments. To qualify for SBA loans through SmartBiz, a business owner must have had no bankruptcies or foreclosures in the last three years and no history of default on government-backed loans. Businesses must also have no outstanding tax liens. SmartBiz also works with non-SBA lenders for businesses that do not qualify for SBA loans.
Types of Loans Offered
SBA Loans – Up to $500,000
6.25% – 7.25%
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