- SBA-guaranteed loans
- Debt refinancing loans
- Working Capital loans
- Commercial real estate loans
- Low interest rates and fees
- Monthly repayments
- No prepayment penalty
- Excellent customer service
Founded in 2009, SmartBiz is a lender that strives to streamline and de-complicate the world of SBA lending. A product of the technology company Better Finance, SmartBiz uses technology to speed up the process of getting an SBA loan.
Unlike most SBA lenders, SmartBiz can determine whether you’re eligible for their loan within a few minutes, so you don’t have to waste time putting together a full application if you don’t have a good chance of being approved.
Self-described as the “white knight in small business lending,” SmartBiz gets away with speeding up the SBA loan process because it is looking for a specific type of business. The SBA as a whole offers installment loans, microloans, disaster relief loans, equipment loans, lines of credit, and every other type of loan you can think of, but SmartBiz only offers SBA 7(a) loans for working capital, debt refinancing, or commercial real estate purchasing or refinancing.
Unfortunately, because SmartBiz is looking to lend to very specific businesses, startups are not eligible for borrowing. You’ll have to have been in business at least two years, have a healthy cash flow, and a solid personal credit history to qualify for a loan.
While this company does eliminate some of the undesirable elements of SBA loans, it can’t eliminate them all. These loans still require a fair amount of paperwork. If you aren’t prepared, gathering those documents can significantly slow the whole process down.
Despite the long process, SmartBiz is an excellent resource for merchants who want an SBA loan. If your business is eligible and you’re looking for a low-cost business loan, this may be the lender for you. Read on for the details!
SmartBiz offers these types of SBA-guaranteed installment loans:
- Debt refinancing
- Working capital
- Commercial real-estate
To be eligible, you and your business have to meet these minimum requirements for debt refinancing and working capital loans:
|Time in business:||2 years|
|Revenue:||Sufficient cash flow to support repayments|
In addition, your business must not have outstanding tax liens, current charge-offs or settlements, or any bankruptcies or foreclosures in the last three years. You also must be a US citizen or a legal permanent resident.
For a commercial real estate loan, you must meet these requirements:
|Time in business:||3 years|
|Revenue:||Sufficient cash flow to support repayments|
Additionally, the real estate in question must be at least 51% owner-occupied, and you must have a solid history of repaying government-backed loans.
Terms and Fees
These are the terms and fees stated on SmartBiz’s website for working capital and debt refinancing loans:
|Borrowing amount:||$30K – $350K|
|Term length:||10 years|
|Interest rate:||Prime rate + 3.75% (loans of $30K – $49K)|
Prime rate + 2.75% (loans of $50K – $350K)
|Other fees:||Referral fee: 2%|
Packaging fee: 2%
Guarantee fee: 0% – 2.25%
Bank closing costs: ~$450
|APR:||5.85% – 8.95%|
Lien on business assets
These are the rates and fees for the commercial real estate loans:
|Borrowing amount:||$350K – $5M|
|Term length:||25 years|
|Interest rate:||Prime rate + 1.5% – 2.75%|
|Other fees:||Referral fee: 0.5%|
Packaging fee: 0.5%
Guarantee fee: 2.25% – 2.8125%
Bank closing costs: ~$5K
|APR:||5.85% – 8.95%|
Lien on the real estate
SmartBiz loans have variable interest rate. The interest rate is calculated using the prime rate; if the prime rate changes, so will your interest rate.
Otherwise, SmartBiz (and the banks it works with) charge a few additional fees. In total, fees add up to the following amounts, depending on how much you’re borrowing:
- $30K – $150K: 4% + ~$450
- $151K – $350K: 6.5% + ~$450
- $350K – $700K: 3.25% + ~$5K
- $700K – $1M: 3.625% + ~$5K
- $1M+: 3.8125% + ~$5M
For comparison’s sake, online loans typically have origination fees that range from 1% – 7% of your loan value.
In total, APRs range from 5.85% – 8.95%, but may fluctuate if the prime rate goes up or down. Other online lenders typically have APRs between 6% and 36%.
SmartBiz can determine whether you’re eligible for a loan in a few minutes via their website. For contrast, with regular SBA loans, you might not know if you’re eligible until you’ve put together the whole application and sent it in.
To determine whether you meet minimum borrower requirements, SmartBiz will ask you a number of basic questions about your business. The company will perform a soft pull on your credit, which will not affect your score.
If you are approved to continue the process, you will be assigned a personal “relationship manager” who will help you with your application. This person will explain the process, answer any questions you might have, and generally be a consistent point of contact and help.
Then, you’ll need to gather and send in financial documents. The larger your loan, the more documents you’ll be required to provide. This step may take a few weeks, depending on the number of documents needed and how fast you’re able to collect and send the information in. After you’ve submitted everything necessary, the next step will vary depending on the type of loan you’re borrowing.
If you are borrowing a debt refinancing or working capital loan, you will be able to accept the offer and receive your funds.
If you are borrowing a commercial real estate loan, you will receive a letter of intent so you can negotiate terms with the property seller and other parties involved in the deal. The property you are interested in will also have to be valued before you are allowed to access the funds. When negotiations and valuation are done, you can accept the offer and receive your funds.
The time from application to funding can take anywhere between one week and three months, depending on the loan product, the speed at which you provide the necessary documents, and other factors.
Sales and Advertising Transparency
SmartBiz provides everything you need to know to make an informed borrowing decision on their website. If you poke around a little bit, you shouldn’t be surprised by anything during the application and loan process.
Customer Service and Technical Support
SmartBiz has an excellent FAQ, which is capable of answering most of the questions that you’ll have about the loan process. If you need answers to more specific questions, customer service is also available via email or phone.
After you’ve begun the loan application process, you will be assigned a dedicated “relationship manager” who will help you through the application process, answer any questions you might have, and generally be available if you need anything.
Negative Reviews and Complaints
Although reviews are largely positive, here are the complaints that some customers voiced about the service:
- Endless paperwork: Even though it’s more efficient in some ways, SmartBiz is still an SBA program, and that means they’ve got to adhere to all the paperwork requirements. You will have to provide a lot of business and financial documents during the application process.
- Additional fees: Some people claimed they didn’t know about the additional fees, or that they were too high. However, I saw the fees clearly disclosed on the website, and SmartBiz’s fees are competitive with others in the industry.
- Rejections: Some customers were disappointed to learn that they were not eligible for a SmartBiz loan, even if they were initially deemed eligible, due to information discovered during the application process.
- Customer service: A few customers reported difficulty getting in touch with their account representative.
For what it’s worth, SmartBiz is very active about responding to negative reviews wherever they crop up. Although SBA loans can be frustrating, its evident that SmartBiz is doing everything they can to streamline the process and keep merchants in the loop regarding the status of their application.
Positive Reviews and Testimonials
- Personal relationship managers
- Speed of funding (relative to other SBA loans)
- Transparent advertising and customer service
- Excellent loan terms
We’d like to hear from you, though! Have you applied for a SmartBiz loan? What was your experience like? Leave a message in the comments!
SmartBiz is a fantastic resource for any eligible merchant that needs a low-cost, long-term loan. Although you will still have to suffer through a fair amount of paperwork, SmartBiz has significantly streamlined the SBA application process.
Although the process may still take a while, a significant perk of SmartBiz is that you have a dedicated account manager who will keep you in the loop and let you know what’s happening with your loan application. This lender may have not been able to completely de-complicate the SBA loan process, but with SmartBiz, at least you don’t have to navigate the application by yourself.