Newtek Small Business Finance Review
- 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. Instead, the company hones in on personalized solutions to fit the specific needs of each small business that seeks financing.
Through Newtek, you can receive a term loan or line of credit to expand your business. You’ll work with a dedicated lending specialist who will help find the best financial solution for your business and will even fill out the 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. Under the agreement of a term loan, a lender 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, instead of giving the borrower a lump sum, the lender extends a credit line. The borrower can draw upon their credit line at will, taking only as much money as they need at any given moment. The credit limit represents the maximum amount of money the borrower can draw. Interest is paid on the amount used. Most 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 Borrower Requirements
Borrower qualifications through Newtek are based on the type of financing you wish to receive. Newtek’s term loans are best for a business that:
- Is an existing US-based business
- Is for-profit
- Has two to three years of tax returns
- Has enough incoming cash flow to cover loan payments
Newtek’s term loans are ideal for businesses in manufacturing, services, retail, wholesaling, construction, special trades, and more.
To receive a revolving line of credit, 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. Additional requirements, including personal credit score and history, business credit score and history, minimum annual revenue, and time in operation, may need to be met to receive a financial product through Newtek.
Newtek Interest 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
|Repayment Terms||7 to 25 years|
With a term loan through Newtek, you can receive financing of $1,000 to $15 million. Repayment terms are between seven and 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:
- Paying taxes
- Working capital
- Meeting payroll
- Covering operational expenses
|Borrowing Amount||$50,000-$1.5 million|
|Repayment Terms||Up to 1 year|
There are two lines of credit available through Newtek. The first is accounts receivable financing, which provides you with $50,000 to $1.5 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 but are renewable.
Because it offers individualized financial solutions, Newtek does not have interest rates listed for its financial products. However, the company does state that it has competitive interest rates. Newtek has an SBA lending program as well as non-SBA financial solutions. Learn more about SBA loans and the benefits they can provide to your business.
To get started with Newtek, fill out the prequalification form on the company’s website. This form requires just a small amount of personal information, including first and last name, company name, contact information, number of employees, and requested loan amount. Once the form is received, 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 that 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 have to connect with a lending specialist over the phone or through the Newtek website.
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 call back through the Newtek website.
If you don’t feel like hopping on the phone, there are online options available to you. 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.
Newtek Reviews, Complaints, & Testimonials
Negative Reviews & Complaints
Newtek has a 1/5 rating based on 34 customer reviews through the Better Business Bureau. The company has had 29 complaints closed within the last three years and 27 complaints within the past 12 months through the BBB. Since the overwhelming majority of these complaints occurred during 2020, many of these complaints are probably PPP-related. The popular but complicated program has led to many lenders getting barraged with negative reviews and complaints. Newtek also has a small but surprisingly negative number of reviews on Trustpilot, where it rates 2.7/5 stars with 5 reviews.
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.
- 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 seems to be struggling as of late, with even the company’s former positive Facebook rating now reduced to 2.7/5 stars. The rating is based on 34 user ratings. There are still some positive reviews, however.
Positive reviewers talked about:
- Speed Of Service: Newtek isn’t the fastest online lender, but it’s pretty fast so far as long-term installment loans go.
- Rates Can Be Reasonable: 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.
Newtek’s promise of finding “business solutions” as opposed to being just another direct lender is alluring. What business doesn’t want to receive a personalized funding solution that can help boost revenue and save money? Newtek seems to offer many financing options, but the opaque rates and terms leave questions that are only answered by contacting the company.
Furthermore, the lack of positive reviews on Newtek’s loans may also be a red flag for potential borrowers. While the company has some 5-star ratings, most reviewers did not state what services they used. Positive ratings that were accompanied by reviews were focused on other business services provided by Newtek. Meanwhile, several complaints were made regarding the company’s loan process.
Potential borrowers 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.