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 $5 million with ten year terms and interest rates of 6.5+ percent.
- Access to SBA loans
- Potentially low APR
- Fast approval
Access to SBA Loans
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 ten year terms, 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.”
Potentially Low APR
SBA loans obtained through SmartBiz have a 6.5+ percent APR compared to loans from cash advance lenders whose APRs can range from 20-90 percent, 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 ten 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 percent of the loan amount and a one-time packaging fee of 2 percent. For loans $151,000 and higher, there is also a 2.25 percent 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.
- Limited track record
- SBA loans
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
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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