NewtekOne Business Loans Review
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Pros and cons of
Pros
- Largest SBA-preferred lender by loan volume
- Offers term loans up to
- Option to prequalify online
- Terms up to months
- Startups with good credit may qualify for funding
Cons
- Undisclosed APRs and fees
- Larger term loans require collateral and lines of credit must be backed by account receivables, inventory or operating capital
- Doesn’t offer merchant cash advances or other bad credit financing options
- Website lacks transparency and customer service team provides incomplete information
small business loans review
, also referred to as just Newtek, is a popular SBA-preferred lender that offers an array of loan options, including term loans up to , a relatively large maximum loan size among small business lenders. Newtek may also offer funding solutions for startups that can provide collateral and have good credit.
But the lender’s website lacks transparency, providing few details about the features, requirements and rates of its loans. Newtek’s customer service team isn’t particularly helpful in providing clarity. Newtek did not reply to our requests for essential information, which raises concerns for small businesses that need help understanding their loan options.
is part of the Newtek brand, which also includes Newtek Bank. The company refers to its nonbank business products as .
- Startups with good credit: will consider new businesses with a minimum credit score of 700 and collateral. However, startups may not be eligible for all loan programs.
- Asset-based financing: Businesses with sufficient collateral may find Newtek’s secured term loans and lines of credit appealing. Secured loans often come with lower rates, but Newtek doesn’t disclose its APRs, so be sure to compare your options.
small business financing at a glance
| Product | Loan amounts | Repayment term | Estimated interest rate | Use cases |
|---|---|---|---|---|
| Business term loan | months | Undisclosed | Working capital, real estate, inventory, refinancing, acquisition and expansion | |
| Secured business line of credit | Renewable -month term | Undisclosed | Working capital, payroll, taxes, expansion, acquisition and other operations | |
| SBA 7(a) loans | Up to | Up to months | for variable loans
| Real estate, working capital, equipment, refinancing, ownership changes and other purposes |
| SBA 504 loan | Up to | months | Approximately of debt
Based on SBA guidelines
| Major fixed assets |
| SBA microloan | Up to | Up to months | Undisclosed | Working capital, inventory, equipment and other purposes |
Term loan
offers small business term loans, which provide a lump sum of cash in exchange for monthly payments over months. Loan amounts range from . Newtek doesn’t charge prepayment penalties, so you can pay off a term loan early to save money on interest. However, there may be down payment and/or collateral requirements for loan amounts greater than $50,000.
Business line of credit
Newtek offers secured business lines of credit with limits ranging from that are designed to meet short-term cash flow needs. Newtek credit lines have a one-year renewable term and must be backed by accounts receivable, inventory or operating capital.
SBA 7(a) loan
Newtek also offers SBA 7(a) loans, which are term loans backed by the Small Business Administration (SBA). Newtek participates in the SBA Preferred Lending Program, allowing the lender to process some SBA loans with reduced requirements and without prior approval from the SBA. This may benefit borrowers with a faster approval time. Newtek is also experienced with the SBA 7(a) application process and is the largest SBA lender by loan volume.
SBA 504 loan
Also backed by the SBA, 504 loans are longer-term loans that you can use to purchase real estate, land, equipment or machinery. The 504 loan program also allows for consolidating or refinancing debt in certain circumstances. The maximum loan amount is .
SBA Microloan
Newtek offers SBA microloans up to for businesses with at least one year of tax returns.
borrower requirements
| Minimum annual revenue | |
| Minimum time in business |
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| Minimum credit score |
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Newtek’s website doesn’t provide much information about borrower requirements, and the lender doesn’t disclose if it has a minimum annual revenue requirement. Newtek generally lends to businesses that are at least two to three years old, but it may provide startup business loans for borrowers that meet credit requirements. To find out for certain if you can qualify, you’ll need to apply.
Newtek does require applicants to provide collateral to qualify for small business loans greater than $50,000. Term loans may be backed by real estate, heavy machinery and/or equipment, and lines of credit may be backed by account receivables, inventory or cash. Newtek may extend up to 85% of the value of your account receivables or up to 50% of the value of your inventory as a line of credit.
If you’re applying for an SBA loan, you’ll also need to meet additional requirements established by the Small Business Administration. For example, your business must operate for profit, meet SBA size requirements, be an eligible business type and have exhausted non-government financing sources. You may also need to make a down payment.
Some term loan options may only be available to businesses in select industries that have been operational for at least two or three years.
Required documents
To qualify for a business loan from Newtek, you may need to submit the following required documents:
- Business plan with financial projections
- Financial statements
- Repayment plan
- Personal and business credit reports
- Tax returns (if available)
- Collateral statement with market value
- Legal documents such as licenses and contracts
Note that the requirements may vary by loan type, collateral type and loan use, but a Newtek customer service representative can help you ensure your application is complete.
Alternatives to
| OnDeck | |||
|---|---|---|---|
| Minimum credit score | (700 for startups and microloans) | for business line of credit, may vary for other products | |
| Loan products offered |
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| Time to funding | Undisclosed | Undisclosed | As soon as the same day |
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| Minimum annual revenue |
vs. business loans
offers versatile options for small businesses, including a small business line of credit for newer businesses with a guarantor credit score of and a higher-limit line of credit with competitive rates for larger small businesses.
Like Newtek, Wells Fargo is also an SBA-preferred lender, and the bank was our top pick for the best SBA loans from a traditional bank, which offers the advantage of in-person support. But it may be tough to qualify for a loan from Wells Fargo, and Newtek offers larger loan amounts.
Learn more in our business loan review.
vs. OnDeck
OnDeck may be a good option for fair credit borrowers since the lender has a lower minimum credit score requirement than Newtek.
But OnDeck is not an SBA lender, and its loan options are relatively limited. The maximum loan size is $250,000 for business term loans, a far cry from Newtek’s maximum loan size. But small businesses looking for a small cash injection may find OnDeck’s processes and requirements easier to navigate, and the lender has an excellent Trustpilot rating based on thousands of glowing reviews from borrowers.
Learn more in our OnDeck business loan review.