The Complete Review of Newtek Business Loans

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.

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. 

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

A 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 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.

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.

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.

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.