The Complete Review of Newtek Business Loans

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Newtek Business Loans: Are They Right for Your Business?

In your search for small business loans, you’ll come across many different lenders, one of which may be Newtek—one of the top-funding, top-rated small business lenders on the market.

Of course, just like any source of small business funding, funding with Newtek comes with its advantages and disadvantages. We’ve compiled this review to help you get all the information you’ll need to determine whether Newtek business loans are the right fit for you.

Let’s take a closer look.

What Are Newtek Business Loans?

Before we dive into all of the details on Newtek business loans, let’s take a step back to get the general idea of this source of small business financing.

Newtek labels itself as “Your Business Solutions Company.” In fact, they offer an array of services to businesses—from business loans to payroll services to insurance and more.

While they deal in more than just loans, Newtek still shells out a remarkably high volume of business funding—over $2 billion since 2003, to be exact—in the form of two different types of business loans.

Let’s break down the two types of Newtek business loans so you can decide whether either of them are right for your business. 

Types of Newtek Loans

Term Loans

The first Newtek business loan we’ll look at is their traditional term loan

term loan is the most traditional form of small business funding—with this type of funding, your business will receive a lump sum of money that you will pay off, plus interest, with scheduled payments. Generally speaking, term loans offer the most manageable terms for small business owners—with longer terms, larger loan amounts, and lower interest rates, they offer funding that won’t seriously impede your business’s cash flow.

Because of their favorable terms, term loans will be harder to qualify for than other, less manageable types of loans. You’ll need strong business financial to qualify for this product.


    Newtek’s term loans can range anywhere from $10,000 to $15 million with repayment terms from seven to 25 years.

    Newtek does not list transparent interest rates on their website, so we recommend shopping around to find the best terms for your business.


    You’ll be able to put a Newtek term loan toward several business purposes, including:

    • Expand or acquire a business
    • Increase working capital
    • Increase cash flow
    • Open a new location
    • Invest in marketing or ecommerce
    • Purchase inventory or equipment
    • Purchase owner-occupied real estate
    • Renovate owner-occupied real estate
    • Leasehold improvements
    • Refinance existing business debt


    In order to be eligible to apply for a term loan from Newtek, you’ll need to business loan requirements.

    First, you’ll need to be a U.S.-based, for-profit company with at least two to three years of business history, documented by your business tax returns.

    You’ll also need to prove your repayment ability from your earnings, meaning strong annual revenue will be key. However, just how much revenue you’ll need is not spelled out.

    Finally, Newtek works with businesses in the manufacturing, wholesaling, services, retailing, general and heavy construction, and special trade construction industries. That said, the list ends with “and more,” so you may still be able to qualify for funding from Newtek if your business is in another industry.

Lines of Credit

Newtek’s other type of small business financing is their business lines of credit, which is a revolving, asset-based line of credit. This means that your business assets—either your inventory or accounts receivable—will secure the loan. Once you pay back the money you draw from your credit line, the balance will reset and you’ll be able to draw from it again—hence the term “revolving.”

One of the nice things about a line of credit is you can keep it in your back pocket to tap into when you need quick cash. And you’ll only pay interest on the amount you actually use—not the total you’re approved for.

    Accounts Receivable-Secured Line of Credit

    The first of your two options is Newtek’s accounts receivable-secured line of credit. With this line of credit, your outstanding invoices will function as a form of collateral. It will allow you to get advances of up to 80% of the value of outstanding invoices that are due to you in either 30, 60, or 90 days.

    As for the credit limit, Newtek’s accounts receivable-secured line of credit can range anywhere from $50,000 to $1.5 million—depending on how much your invoices are worth. Additionally, it will come with a one-year term that you can easily renew when the year is up.

    Inventory-Secured Line of Credit

    The other asset you can use to secure your business line of credit is with your inventory. With Newtek’s inventory-secured line of credit, you’ll be able to offer almost any non-perishable as collateral. Just like its accounts receivable-secured counterpart, this secured line of credit will come with a one-year, easily renewable term.

    However, with this version, you’ll only be able to access lines of credit ranging from $50,000 to $500,000. Additionally, you’ll only be able to receive an advance of 50% of your inventory’s worth.

    Line of Credit Uses

    Both of these lines of credit can be put to use in a variety of ways. Most business owners use their business lines of credit for general operational needs, but the proceeds you get from tapping into your line of credit can be put to more specific costs, like meeting payroll and paying taxes.


    Newtek doesn’t provide many specifics on their requirements for these funding products; however, they have a less rigorous underwriting process and quicker turnaround time.

    This is because their lines of credit will be secured by your business’s assets (your inventory or invoices), so if you stop making payments, Newtek can seize and liquidate these assets to recoup their money. This means less risk for the lender and less stringent requirements for the borrower.

Alternatives to Newtek Business Loans

Newtek business loans may be a good fit for your business, but without clear transparency regarding their terms and rates, it’s hard to say whether they’re truly the best option. Luckily, there are many lenders out there who offer term loans and lines of credit.

Let’s take a closer look at some of these alternatives.

Term Loans

If you’re searching for a term loan for your small business, then consider Funding Circle, who provides term loans ranging in size from $25,000 to $500,000 with rates as low as 4.99%.

There’s no annual revenue requirement, but Funding Circle is looking for business owners with at least two years of business history and a credit score minimum of 620. If you qualify for a term loan from Funding Circle, they’re able to fund you in as little as five days.

Lines of Credit

Consider getting a business line of credit through the online lender Kabbage. Kabbage’s line of credit is also revolving, and it doesn’t require a personal guarantee to secure it.

With a Kabbage line of credit, you’ll just have to make a monthly payment of 1.5% to 10% of the amount of debt you’ve taken out. After you repay your balance plus its fee, your credit line will return to its original value.

Plus, you won’t have to wait long for the funds you’ll gain access to with this funding option—Kabbage can fund business lines of credit as quickly as the same day.

The Bottom Line

At the end of the day, there are so many lenders out there vying for your business. Without transparency around Newtek’s loan rates and terms, we can’t say they’re the best option for any small business. Luckily, there are many other lenders out there who are more upfront about their terms, offer a wide array of financing options, and can fund in a matter of days.

No matter which lender you choose, though, be sure to compare several options to make sure you’re getting the best terms possible. Your business will thank you.

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Vice President and Founding Editor at Fundera

Meredith Wood

Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera. She launched the Fundera Ledger in 2014 and has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending. She is a monthly columnist for AllBusiness, and her advice has appeared in the SBA, SCORE, Yahoo, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, MyCorporation, Small Biz Daily, StartupNation, and more. Email:
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