Newtek Small Business Finance Review
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- Date Established
- 1998
- Location
- Lake Success, NY
Pros
- Suited for small businesses
Cons
- Unsuited for startups
- Opaque terms & fees
Overview
Newtek is a direct lender that brands itself as “Your Business Solutions Company.” In order to stand out from the pack of small business lenders, Newtek focuses on more than just providing 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, line of credit, or commercial real estate loan to expand your business. You may even be able to combine several products to best fit your short- and long-term financial needs. 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 pre-qualified for a financial product in 48 hours or less.
No matter what type of financial problem you encounter, Newtek has solutions. Through its loan programs, you can receive between $10,000 and $10 million depending on the type of financing you receive and how proceeds will be used. Since its founding in 1998, the company has helped borrowers obtain over $2 billion in business funding. Newtek has helped over 100,000 businesses not just receive funding but also reduce costs, minimize risks, and boost revenues.
Table of Contents
Services Offered
Borrower Qualifications
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 U.S.-based business
- Is for-profit
- Has 2 to 3 years of tax returns
- Has enough incoming cash flow to cover loan payments
Newtek’s term loans are ideal for businesses in industries including manufacturing, services, retail, wholesaling, construction, special trades, and more.
To qualify for a commercial real estate loan through Newtek, you should meet the following requirements:
- Be an existing U.S.-based business
- Have 2 to 3 years of tax returns
- Be a for-profit business
- Demonstrate expertise in management
- Have a feasible business plan
- Demonstrate the ability to repay your loan
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 revenues, and time in operations, may need to be met in order to receive a financial product through Newtek.
Need an alternative? Try OnDeck:
Terms & 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 Expansions
- Acquisitions
- Resolving Cash Flow Issues
- Inventory & Equipment Purchases
- Real Estate Renovations Or Purchases
- Debt Refinancing
| Requirement | Minimum requirement |
|---|---|
| Borrowing Amount: | $10,000 - $10,000,000 |
| Repayment Terms: | 7 to 25 years |
With a term loan through Newtek, you can receive financing of $10,000 to $10 million. Repayment terms are between 7 to 25 years. Your loan may come with no prepayment penalties, although some products may have limited penalties.
If you need to purchase or refinance commercial real estate, Newtek’s commercial real estate loan may be the right solution for your business. These funds can be used for:
- Purchasing Or Refinancing Commercial Real Estate
- Acquiring Land
- Funding Construction Costs
- Building Expansions
| Requirement | Minimum requirement |
|---|---|
| Borrowing Amount: | $125,000 - $10 million |
| Repayment Terms: | Up to 25 years |
With a commercial real estate loan, you can receive $125,000 to $10 million. Repayment terms are available up to 25 years, with as little as 10% equity injection required.
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
| Requirement | Minimum requirement |
|---|---|
| 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 that are 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. You’ll receive an advance rate of up to 50% with 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 any of its financial products. However, the company does state that it has competitive interest rates. Newtek offers Small Business Administration loans, as well as non-SBA financial solutions. Learn more about SBA loans and the benefits they can provide to your business.
Application Process
To get started with Newtek, fill out the prequalification form on the Newtek website. This form requires just a small amount of personal information, including first and last name, company name, contact information, number of employees, and loan amount requested. 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. Pre-qualifications 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.
Compare with Lendio:
Sales & Advertising Transparency
Newtek offers some general information about the loans and financial products and services it provides to small businesses. However, in order 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.
User Reviews
Negative Reviews & Complaints
Newtek has a 1-star rating based on four customer reviews through the Better Business Bureau. The company has had two complaints closed within the last three years, and zero complaints within the last 12 months through the BBB. On the company’s Facebook page, it has a 3-star rating based on 30 reviews. Common complaints about Newtek include:
- Documentation Requirements: One of the most common complaints surround 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 that there was confusion over what paperwork was needed and when it needed to be sent.
- Lengthy Loan Process: Even though pre-qualifications can be received quickly, some customers had complaints about the time it took to actually 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 has several 5-star ratings on its Facebook page, but unfortunately, many customers declined to elaborate on what contributed to their positive experiences. While some customers did leave their thoughts on the company, these comments were based on other services provided, such as web hosting and credit card processing. A total of nine people recommended Newtek’s services through Facebook.
Final Verdict
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 revenues 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 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 their financial products, and borrower requirements to determine if this lender is the right fit for their small business.
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Erica Seppala
Erica is a writer based in Greenville, South Carolina. She is a graduate of Limestone College. Initially determined to be an accountant, she put away the calculator and picked up a laptop to pursue her dream of being a writer. Erica has spent the past 10 years writing blogs and articles for hundreds of private clients, and she loves sharing her love of research and the written word with everyone around her.
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Organization Name: MToxins Venom Lab LLC
I did a large scale SBA loan with Newtek and found them to be professional and courteous. We had an excellent account manager who did a great job communicating and was extremely fun to work with. SBA loans are a lot of paperwork, I mean, it’s a federal loan and that is not Newtek’s’ fault. So, if you’re going for a SBA loan make sure you know just how much paperwork is involved. Newtek helped me navigate through the paperwork and frustrations therein. I cannot say enough good things about this company and if you are well educated in the process, respectful, and willing to put in the effort, I believe anyone will find Newtek a great resource to help you grow your business.
Organization Name: Glencadia Corporation
I took out a small business administration loan administrator through Newtek. They never sent me a statement and when a payment went missing- which I repaid right away- they put all kinds of punitive fees on me and when I refused to pay those unfair fees, they moved immediately to “liquidate” me… how lovely! I think the fact that the SBA will repay them 85% immediately they have an incentive to be jerks to the lender.
This comment refers to an earlier version of this review and may be outdated.