Newtek Small Business Loan Review

About Newtek

Newtek

Newtek, The Small Business Authority, is a publicly traded company (NASDAQ:NEWT) as well as the largest non-bank Government Guaranteed Lender in the U.S. providing comprehensive and structured financing solutions to all types of small businesses, in all 50 States, for virtually all business purposes. Newtek provides term loans which range from $50,000 to $10 million with 7-25 year amortization schedules. Newtek has been providing much needed capital to small and medium sized businesses for more than 12 years. We also provide revolving lines of credit backed by inventory and receivables. Our team of seasoned and highly qualified Business Service Specialists work closely with borrowers to profile their needs and position the solutions that work best for them; and then are their primary contact throughout the entire lending process – from application to loan closing and funding.


Who is Newtek?

Launched in 1998, Newtek is a small business finance group offering a wide array of financial services including loans, e-commerce payment solutions, payroll and benefits, web solutions, insurance, and technological services. In addition to offering business solutions to small businesses, Newtek also works with financial institutions through programs such as its Business Lender Program, Business Solutions Program, Branch Cash Advance, and Force-Placed Insurance.

The business solutions provider has worked with over 100,000 businesses, helping them to acquire funding, lower risk and cost, and become more profitable. Newtek also combines loan offerings to develop a best-fit solution for its clients. For example, Newtek can combine a line of credit with a term loan if necessary.

Newtek went public in 2000 and currently has assets that total $450 million. With Newtek’s wide array of services and short- and long-term lending solutions, they just might be the complete small business solutions provider you’ve been looking for.


Why do business with Newtek?

There are a number of reasons to work with Newtek for your small business needs.

First, it resembles the e-commerce behemoth Amazon in its ability to co-exist in different industry spaces. In addition to loan services, Newtek also offers—as the previous section noted—many other business solutions such as payroll and group health insurance plans. So if a business owner has questions about employee benefits or security compliance, for example, he or she can get help with these services in addition to business financing.

Newtek representatives are extremely hands-on. The same specialist will walk you through the documentation process, and even complete documentation for you if needed. Newtek also has customer service reps available 24 hours days a day, seven days a week, 365 days a year.

Newtek’s customization options allow for maximum flexibility and speed. Newtek can customize your solutions to fit the needs of your business. The provider can combine term loans and lines of credit to develop the most ideal financing solution for a business.

Once your application is submitted and approved, you’ll receive a line of credit within two weeks’ time.

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Newtek small business funding solutions

Newtek offers term loans, revolving lines of credit and commercial real estate to businesses in need of financing. According to their website, they can offer more desirable terms than most traditional banks, including payback terms as long as 25 years, loans up to $10 million, and dynamic solutions that combine term and lines of credit to satisfy short- and long-term financing needs.

Here’s an overview of Newteks business loans:

Term Loans- Newtek offers loan terms anywhere from 7 to 25 years with either limited or no penalty for prepayment. Newtek term loans can be used for business expansion or renovations, acquiring a new business, working capital, or refinancing debt.

Revolving Lines of Credit- With a revolving line of credit, you can borrow up to $1.5 million for a constant flow of working capital. Credit lines are secured by your accounts receivable; however, this solution offers a bit more flexibility than a traditional loan.

Commercial Real Estate- Newtek’s commercial real estate loans are available from $125,000 – $10 million, with as little as 10% of borrower equity injection required. The loan can be used for commercial real estate refinancing, purchasing land, refinancing debt and new property purchases.

Newtek Small Business Loans: How they compare
Loan product Loan amount Loan term APR range/ factor rate Fees Time to funding
Term Loans $10,000 – $10 million 7-25 years Varying rate connected to prime rate; rates as low as 5.25% No application fee 48 hours or less for prequalification; 4-6 weeks on average with underwriting process and closing.
Line of Credit $50,000 – $1.5 million 1 year (up to 80% advance rate), renewable Varies. Will disclose only after business owner begins application process. No application fee Two weeks or less
Commercial Real Estate $125,000 – $10 million 10 – 25 years 10% minimum down payment Flexible and limited pre-payment penalty 48 hours or less to pre-qualify

Rates current as of 6/12/2018


Eligibility requirements

The eligibility requirements for Newtek’s term loans, lines of credit and commercial real estate loans allow have the same requirements:

  • Annual Revenue – Not specified. A business must demonstrate the ability to repay the loan based on its past, present and future cash flow.
  • Minimum business or personal credit score – No set minimum.
  • Time in Business – 2 years

Before jumping into a financial agreement with Newtek, it’s important to understand all the fine print and various eligibility factors. In general, businesses should be for-profit businesses that operate in the United States and they must prove they’re capable of repaying the small business loan.

On term loans, borrowers are required to list Newtek as the first lien on assets, with the possibility of also being listed as a first lien on personal ones as well. For Newtek’s commercial real estate financing, the property must be at least 51% occupied or used for the borrower’s operating business.

Can any business get a loan with Newtek?

Businesses that have been operating for less than two years are not eligible to apply for a loan with Newtek. In addition, businesses running a casino or gambling operation are ineligible for funding. We reached out to the company, Will Rose, director of marketing for Newtek, said they can generally work with most companies and there’s no specific industry they ban outright.

Newtek’s Term Loans web page lists manufacturing, retailing, services, wholesaling, general and heavy construction, and special trade construction as industries they work with.


How to apply for Newtek business financing

Newtek’s website can be very vague in regards to some important details, such as the minimum credit score required for the entire application process. Upon calling the company, you learn, however, that no minimum credit score exists. Also, although not clearly specified, an application cannot be completed online.

Business owners are encouraged to fill out a request form or contact a loan specialist at 855-763-9835.


Pros/cons

Pros Cons
  Newtek offers a bevy of lending options for business owners.   Few interest rates and fees are not available online, requiring interested parties to contact the company to learn more.
  A small business can secure a term loan with a wide range of options, starting at $10,000.   A business owner will need to show at least two years of tax returns.
  In addition to financing, Newtek offers additional business solutions such as technology, payments, payroll and benefits.   The website is confusing on eligible/ineligible industries.

Who is the best fit?

A small business owner that has been in business for at least two years and operates in one of their listed industries -service, retail, gas station or convenient store, special purpose or multi-purpose real estate- would be a good fit for a Newtek loan. However, the website notes that “more” industries are eligible for funding.


The bottom line: How Newtek stacks up

Newtek’s website is somewhat transparent regarding the range of loan amounts available and the range of repayment terms, while at the same time, completely vague on the finer details.

When used in combination with their other business solutions, Newtek’s comprehensive variety of lending options for both short- and long-term solutions could be an attractive solution for you.

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