Newtek Small Business Finance Review
Newtek offers business solutions in need of financing. While they offer high borrowing amounts and long-term options, the cost is not disclosed.
- Multiple types of financing available
- Long-term financing options available
- No prepayment penalties
- High borrowing amounts
- Applicants can quickly get prequalified
- Website advertising is not informative
Newtek Small Business Finance Overview
Newtek Small Business Finance, LLC, is a direct lender that brands itself as “Your Business Solutions Company.” To stand out from the pack of small business lenders, Newtek focuses on more than just providing small business loans. That means Newtek analyzes your business needs and suggests the best financing options, including loans, lines of credit, and blended solutions that meet both your short- and long-term needs.
Through Newtek, you can receive a term loan or line of credit to expand your business, or a mix of the two. You’ll work with a dedicated lending specialist who will help find the best financial solution for your business’s immediate and long-term goals. The specialist you’re teamed with will even fill out the application forms and documents for you. Most clients are prequalified for a financial product in 48 hours or less.
Newtek’s high borrowing limits and the long repayment term will likely catch the eye of many prospective borrowers. Unfortunately, Newtek doesn’t disclose much information about the costs of borrowing, so you’ll be proceeding at your own risk.
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Services Offered By Newtek
Newtek offers term loans and lines of credit with financing from $50,000 to $10 million.
Under the agreement of a term loan, Newtek provides a lump sum of cash to a borrower. In exchange, the borrower pays back the amount borrowed plus interest, with payments made in fixed intervals.
With a line of credit (read our guide on how to get one), instead of giving the borrower a lump sum, Newtek extends a credit line that the borrower can draw upon at will, taking only as much money as needed at any given moment. The credit limit represents the maximum amount of money the borrower can draw. Interest is paid on the amount used. Newtek lines of credit are revolving, meaning that as you pay off your balance, the credit becomes available for you to draw upon again. Lines of credit usually last for an agreed-upon amount of time.
Newtek also offers SBA loans. Newtek is an SBA-preferred lender and is considered by the SBA to be on the list of the best SBA lenders. If you’re interested in SBA loans and wondering if you’re qualified, check out our SBA loan explainer article to learn more.
Newtek Borrower Qualifications
Borrower qualifications through Newtek are based on the type of financing you wish to receive. Newtek term loans are aimed at businesses that meet these qualifications:
- Existing US-based business
- Has 2-3 years of tax returns
- Has enough incoming cash flow to cover loan payments.
Newtek’s term loans are available for businesses in manufacturing, services, retail, wholesaling, general and heavy construction, special trade construction, and more.
Lines of credit typically are more flexible than traditional loans, with less rigorous underwriting and quicker turnaround times. To receive a revolving line of credit between $50,000 and $3 million from Newtek, you must have collateral to secure the advance. Your line of credit can be secured using unpaid invoices or non-perishable inventory.
Please note that all borrower requirements listed here are minimum requirements. You may need to meet additional requirements, including personal credit score and history, business credit score and history, minimum annual revenue, and time in operation, to receive a financial product through Newtek.
Newtek Rates & Fees
One of the financial products offered through Newtek is a term loan. Proceeds from a term loan can be used for a variety of purposes, including but not limited to:
- Business expansion
- Resolving cash flow issues
- Inventory and equipment purchases
- Real estate renovations or purchases
- Debt refinancing
With a term loan through Newtek, you can receive financing of $10,000 to $10 million. Repayment terms are between 7-25 years. Your loan may come with no prepayment penalties, although some products may have limited penalties.
Newtek also offers revolving asset-backed lines of credit that provide more flexibility for your short-term financing needs. Funds can be used for short-term needs, such as:
- Paying taxes
- Working capital
- Meeting payroll
- Covering operational expenses
- Paying off more expensive financing
- Marketing expenses
There are two lines of credit available through Newtek. The first is accounts receivable financing, which provides you with $50,000 to $3 million for your accounts receivables. You can receive an advance of up to 80% for invoices due within 30 to 90 days. Repayment terms are set at 12 months and are renewable.
The second option is an inventory-backed line of credit. You can receive a credit line of $50,000 to $500,000 and an advance rate of up to 50% with your qualified, non-perishable inventory. Repayment terms are 12 months and are renewable.
Because it offers individualized financial solutions, Newtek does not list interest rates for its financial products. However, the company does state that it has competitive interest rates. We were able to use the chat box on the website to ask a customer support representative to provide general information on interest rates. She gave two current examples: a rate of 6.75% on 7a loans and 10.5% on a microloan. If you have a specific loan product in mind, you should be able to gain a general idea of the APR by asking this way.
To get started with Newtek, you’ll need to fill out the prequalification form on the company’s website. This form requires a fair amount of personal information, including first and last name, date of birth, company name, contact information, number of employees, and requested loan amount. You’ll also have to provide your Social Security number for a credit check, although Newtek does not reveal on its website what score is required to qualify for lending.
Once you submit the form, a member of the Newtek team will call to gather more information and discuss financial solutions for your business. If you want to get the process started immediately, you can bypass the online form and simply connect with Newtek by phone.
You’ll have a dedicated lending specialist who will complete all application documents for you. Prequalifications are typically available within 48 hours, and your lending specialist will continue to work with you every step of the way to finalize your loan.
Sales & Advertising Transparency
Newtek offers some general information about the loans, financial products, and services it provides to small businesses on its website. However, to learn about the specific rates, terms, and products available for your business, you must connect with a lending specialist over the phone or through the Newtek website, and that includes sharing personal contact information and your Social Security number.
Customer Service & Technical Support
Newtek makes it easy for prospective and current clients to get in touch. You can contact Newtek by phone to start the application process or to inquire about the company’s products and services. You can also request a callback through the Newtek website.
If you don’t feel like picking up the phone, you can take advantage of online options. You can send your questions or comments through email or start a live chat through the company’s website. You can also send inquiries or find out the latest news through Newtek’s social media profiles on Facebook, Twitter, and LinkedIn.
Remember that as you apply for funding from Newtek, you’ll be assigned a dedicated account representative who will not just help you fill out the forms needed to qualify; your rep will do that work for you.
Newtek User Reviews
Although it’s easy to find both negative and positive comments from Newtek customers, it’s important to examine the company’s overall reputation. To that end, Newtek is accredited with the Better Business Bureau and currently has an A+ rating with the BBB despite its current customer review composite score of 1.61/5.
There’s an interesting contrast between the BBB rating and the reviews from a total of 46 users. So let’s look at another review site, to see if customers elsewhere have similarly poor opinions of Newtek. On Trustpilot, Newtek has just a small sample, with only five user reviews and a composite rating of 2.7/5. So we will look through user comments to see if we can identify trends.
Negative Reviews & Complaints
Newtek has had 41 BBB complaints closed within the past three years and 13 complaints closed within the past 12 months. While the most recent reviews are majority positive, a number of older ones, from 2020 and 2021, seem to be related to Paycheck Protection Program (PPP) loans. The popular but complicated PPP program led to many reliable lenders getting barraged with negative reviews and complaints, and since the program has ended we will not be focusing on those.
Beyond PPP-related issues, common complaints in Newtek small business finance reviews include:
- Documentation Requirements: One of the most common complaints revolves around the documentation and paperwork requirements needed to receive a loan.
- Disorganization: Some customers complained that paperwork sent to Newtek was lost and needed to be resent. Another complaint was confusion over what paperwork was needed and when it needed to be sent.
- Unresponsive Customer Service: More than a few customers said that they were unable to connect with their account reps and, when they did, the reps were unhelpful.
- Lengthy Loan Process: Even though prequalifications can be received quickly, some customers complained about the time it took to complete the loan process.
- Unable To Meet Requirements: Some reviewers state that despite having high credit scores and solid credit histories, they were unable to receive financing through Newtek.
Positive Reviews & Testimonials
Newtek’s reputation may have taken a hit during the past couple of years, but it’s still easy to find a healthy dose of positive reviews. And satisfied Newtek customers are enthusiastically positive. Here’s a sampling of what they had to say :
- Speedy Service: Newtek isn’t the fastest online lender, but it’s pretty fast so far as long-term installment loans go.
- Reasonable Rates: One customer said they were very happy with the rate they received on their loan.
- Customer Service: Several customers spoke highly of the efforts of their Newtek representative, saying they appreciate the personal attention of a dedicated, professional, helpful, and knowledgeable rep.
Final Verdict Of Newtek Small Business Finance
Newtek’s promise of finding “business solutions” as opposed to being just another direct lender is alluring. What business owners don’t want to receive a personalized funding solution that can help them boost revenue and save money? Unfortunately, while Newtek seems to offer many financing options, its opaque rates and terms leave questions that are only answered by contacting the company and sharing personal information.
We also feel that the mixed reviews on Newtek’s loans may be a red flag for potential borrowers. While the company has some 5-star ratings, many others rated Newtek far lower. Even discounting PPP-related complaints, some questions remain regarding the reliability of the company’s loan process.
If you’re interested in learning more about a potential Newtek loan, you can inquire by phone or online to find out more about what Newtek has to offer, potential costs associated with its financial products, and borrower requirements to determine if this lender is the right fit for their small business. If you’d like to keep looking for a lender that might suit you better, we have suggestions.
For lines of credit, check out our list of the best business lines of credit. If you’ve got relatively good credit, we suggest you take a look at our best loans for good credit. If your credit is less than stellar, don’t worry, because we’ve got options for you, too. For example, you can apply for a loan that doesn’t require a credit check.
Whatever you decide to do, remember that you’ve got options, so take your time, do your own research, read some user reviews, and talk to reps when you can. The right business loan for you is out there, and we wish you the best in your search to find it!
We've done in-depth research on each and confidently recommend them.
We've done in-depth research on each and confidently recommend them.