Need Help Finding a Loan?
- Date Established
- San Francisco, CA
- Suited for small and large businesses
- Excellent terms and fees
- Excellent customer support
- No prepayment penalty
- Some additional fees
- Somewhat lengthy application process
Founded in 2009, SmartBiz is a service that has streamlined and simplified the world of SBA lending. SmartBiz does not directly issue loans—instead, they use technology to match eligible applicants up with a lender in their network of preferred SBA bank lenders. Self-described as the “white knight in small business lending,” SmartBiz can determine whether you are likely to be eligible for an SBA loan from one of their partners within a few minutes. You don’t have to waste time putting together a full application if you don’t have a good chance of being approved.
SmartBiz and its partner banks participate in the SBA’s most popular loan program: the 7(a) Business Loan program. In particular, loans procured through SmartBiz can be used for working capital, debt refinancing, or commercial real estate purchasing or refinancing.
If you are interested in one of the SBA’s other loan programs, such as CDC/504 Loans or Microloans, you’ll have to look elsewhere for funding. Additionally, startups and businesses with poor credit are not eligible for borrowing. To qualify for a loan through SmartBiz, you’ll have to have been in business at least two years, have a personal credit score of at least 650, and a business credit score of at least 150.
While this company does eliminate some of the undesirable elements of SBA loans, it can’t eliminate them all. Because SBA loans are backed by the government, they still require a fair amount of paperwork. If you aren’t prepared, gathering those documents might take a while.
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 service for you. Read on for the details!
Table of Contents
- Services Offered
- Borrower Qualifications
- Terms & Fees
- Application Process
- Sales & Advertising Transparency
- Customer Service & Technical Support
- Negative Reviews & Complaints
- Positive Reviews & Testimonials
- Final Verdict
SmartBiz offers these types of SBA-guaranteed installment loans through their bank partners:
- Debt refinancing
- Working capital
- Commercial real-estate
Eligibility varies depending on the loan you’re interested in.
Working Capital & Debt Refinancing Loans
To be eligible for a working capital or debt refinancing loan, you must have a for-profit business. All business owners must be US citizens or legal permanent residents without criminal backgrounds or defaults on government-backed loans. Your business must not have open tax liens or a bankruptcy or foreclosure in the past three years.
In terms of credit score and time in business, your business needs to meet these requirements:
|Time in business:||2 years|
|Personal credit score:||650|
|Business credit score:||150|
SmartBiz does not state specific revenue requirements, saying only that you must have “cash flow to support loan payments.” Not sure if you do? Use the debt service coverage ratio (DSCR) to learn whether your cash flow can support debt payments.
Commercial Real Estate Loans
For a commercial real estate loan, you must meet these requirements:
|Time in business:||3 years|
|Personal credit score:||675|
|Revenue:||Sufficient cash flow to support repayments|
Additionally, the real estate in question must be at least 51% owner-occupied, and you must not have any prior defaults on government-backed loans.
Terms & Fees
Through their partners, SmartBiz offers two types of business loans: working capital and debt refinancing loans, and commercial real estate loans. The terms and fees vary depending on the product.
Working Capital & Debt Refinancing Loans
These are the terms and fees for working capital and debt refinancing loans:
|Borrowing amount:||$30,000 – $350,000|
|Term length:||10 years|
|Interest rate:||Variable, prime rate + 3.75% (loans of $30K – $49K)|
Variable, prime rate + 2.75% (loans of $50K – $350K)
|Other fees:||Referral fee: 2%|
Packaging fee: 2%
Guarantee fee: 0% – 3.75%
Bank closing costs: ~$450
|APR:||6.36% – 9.57%|
Lien on business assets
Working capital and debt refinance loans have variable interest rates; the rate is calculated using the prime rate; if the prime rate changes, so will your interest rate.
Aside from the interest rate, SmartBiz and its partner banks charge a few additional fees:
- SmartBiz charges a one-time referral fee and one-time packaging fee, both of which are a maximum of 2% of the borrowing amount.
- Loans have a guarantee fee between 0% and 3.75%, depending on the size of the loan. If your loan is $125,000 or less, the guarantee fee is 0%.
- Bank closing costs, which include standard bank fees, typically add up to about $450, but additional 3rd-party report charges may also apply.
Working capital and debt refinance loans through SmartBiz have no repayment penalties.
Commercial Real Estate Loans
These are the rates and fees for SmartBiz commercial real estate loans:
|Borrowing amount:||$500,000 – $5,000,000|
|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% – 3.25%
Bank closing costs: ~$5,000
|APR:||6.36% – 9.57%|
Lien on the real estate
Like the working capital and debt refinance loans, commercial real estate loans have variable interest rates. Additionally, real estate loans carry these fees:
- SmartBiz charges a one-time referral fee and one-time packaging fee, both of which are a maximum of 0.5% of the loan amount.
- Loans up to $5M necessitate a guarantee fee, paid to the SBA, between 2.25% and 2.75%, depending on the loan amount.
- Bank closing costs typically add up to about $5,000 and include standard bank fees, appraisal, and title fees. Additional 3rd-party report charges may also apply.
Real estate loans also carry prepayment penalties for the first three years:
- If you repay in the first year, there is a 5% prepayment penalty
- If you repay in the second year, the fee is 3%
- If you repay in the third year, the fee is 1%
After the third year, there are no prepayment penalties.
SmartBiz can determine whether you have a good chance of qualifying for an SBA loan in a few minutes via a questionnaire on 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. At this stage, the company performs an initial soft pull on your credit, which does not impact your credit score. When your loan application proceeds to funding, SmartBiz Loans and its lenders request a hard pull on your credit, which appears as an inquiry on your credit report and may have a small impact on your score. However, this only happens after your application is in the funding process and matched with a lender who is likely to fund your loan.
If you are approved to continue the process, you are assigned a personal “relationship manager” to help with your application. This person can 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 documents (like two years of personal and business tax returns). 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 & 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 and do your research, you won’t be surprised by anything during the application and loan process.
Customer Service & Technical Support
SmartBiz has an excellent FAQ, which is capable of answering most of the questions 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 & Complaints
SmartBiz has a profile on the Better Business Bureau, with one complaint. The lender also has a fair amount of reviews on TrustPilot (with an aggregated rating of 9.3 out of 10) and Google Reviews (with an aggregated rating of 4.5 out of 5), among a few other places on the web.
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 facilitating the SBA’s loan program, and that means they have to adhere to all the paperwork requirements. You will have to provide a lot of business and financial documents (like two years of business and personal income tax returns, a profit and loss statement, and a balance sheet) 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, it’s 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 & 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 submit a fair amount of paperwork, SmartBiz has significantly streamlined the SBA application process.
The process may take a while, but 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 service doesn’t completely simplify the SBA loan process, but with SmartBiz, you don’t have to navigate the application by yourself.