Overview

Newtek Small Business Lending is the small business finance segment of Newtek Business Services. The company, which was founded in 1998, is based in West Hempstead, New York, and is a publicly traded as NEWT on NASDAQ. It has provided more than half-a-billion dollars in loans to over 800 U.S. based small businesses.

How Does Newtek Work?

Newtek has three main types of financing for small- to medium-sized companies: term loans, merchant cash advance and accounts receivable management. The merchant cash advance option is by far the most expensive but it is a convenient and fast source of short-term credit. You can apply online or over the phone. In both cases a loan specialist will contact you to walk you through the process and ensure you complete the forms and documentation correctly.

What Are The Interest Rates?

Interest rates vary depending on the type of loan you apply for, your credit, the size and the term of the loan. SBA loans usually have interest rates of around 6 percent. Accounts receivable financing usually has rates of 10 to 15 percent. Merchant cash advances are much more expensive but are usually for terms of 30 to 60 days.

How Much Money Can I Borrow?

Businesses that qualify for SBA loans can receive loan amounts ranging from $10,000 to $10 million. Accounts receivable financing, on the other hand, has loan amounts ranging from $50,000 to $1.5 million.

Which States Does Newtek Operate In?

Newtek operates in all 50 states.

What Is the Application Process Like?

Borrowers can start the application online by completing a short form or over the phone. In both cases they must talk with a loan specialist that will help them fill in the forms and documentation required to complete the application.

Requirements vary depending on the type of loan requested. Newtek looks for businesses with 3 to 10 years in business, good collateral and owns commercial real estate. It also requires a personal guaranty from any equity owner with an interest in the company of 20 percent or more.

Businesses looking for an SBA loan must not have a net worth of more than $7.5 million and the average income over the last 2 years must not be more than $2.5 million. The business must be located and operated from within the United States and the owners must be either U.S. citizens or resident aliens.

How Is Newtek Better than Other Lenders?

Newtek is the largest non-bank lender of SBA loans, which allows it to provide a streamlined, shorter and simplified SBA-loan application process. It is a nationally licensed lender; has been in business for over 16 years; and has a lot of experience servicing other types of business financing methods, which is a bonus for businesses that don't qualify for regular government-backed loans. Loan specialists handle every application and fill in complicated paperwork for borrowers, reducing the time and money businesses have to invest in the application process.