Newtek Lending Review

Pros

• Choice of financing options
• Long terms available
• High borrowing amounts
• Quick prequalification
• No prepayment penalties

Cons

• Not available to new businesses
• Lack of transparency regarding rates

What Is Newtek Lending?

Newtek Lending is a loan company operating as part of the NewtekOne family of small business service providers. Newtek lending options include small business loans and lines of credit, with funding available in amounts as low as $1,000 and as high as $15 million and repayment terms from five to 25 years.

Newtek pairs borrowers with a dedicated lending specialist to design a customized borrowing strategy that fits each business. Newtek reps can analyze your business needs and suggest the best financing options, including loans, lines of credit, and blended solutions that meet both your short- and long-term needs.

Newtek is a preferred SBA lender, offering SBA 7(a) loans and has earned a place on our Merchant Maverick list of the best SBA lenders.

Let’s dive in to see why we gave this lender an overall rating of 3.3 out of 5 stars.

Newtek Lending Services

Newtek offers term loans and revolving lines of credit with financing from $50,000 to $15 million.

Newtek offers two types of lines of credit: asset-based and accounts-receivable financing. Asset-based financing typically bases your credit amount on an asset, such as inventory, that you offer as security to guarantee the credit. Inventory lines of credit run from $50K-$5 million, with most non-perishable inventory qualified as security.

Accounts receivable financing, on the other hand, uses your outgoing invoices as security, and your credit total will be based on your total accounts receivable.

Accounts receivable lines of credit from Newtek are available from $50K-$5 million and allow you to borrow against invoices due 30, 60, and 90 days out.

If you’re looking for an SBA loan, Newtek is a preferred SBA lender specializing in SBA 7(a) loans. Our SBA loan explainer article can help you determine if an SBA loan is a good fit.

With terms loans, lines of credit, and SBA loans available, most businesses can find a good funding option for them with Newtek, giving it a solid 4.6/5 for our services rating.

Other Services Offered By NewtekOne

Newtek’s small business financing, loans, and lines of credit are not the only resources the company offers. Here are some others:

Newtek Borrower Qualifications

Newtek’s term loans are available for businesses in a wide range of industries, including manufacturing, services, retail, wholesaling, general and heavy construction, special trade construction, and more. Borrower qualifications through Newtek are based on the type of financing you wish to receive.

The main qualification for a Newtek small business line of credit is showing that you can provide collateral to secure the advance. Your line of credit can be secured using unpaid invoices or non-perishable inventory.

However, Newtek doesn’t say how much collateral is needed to secure a loan. Newtek also provides hardly any information about borrower requirements for term loans. The only specifics I was able to find were from a Newtek One blog article from 2015. For this reason, Newtek only gets a 2.8/5 star rating for having non-transparent borrower qualifications.

Newtek Terms & Fees

With a term loan through Newtek, you can receive financing of $1,000 to $15 million. Repayment terms are between 5-25 years. Your loan may come with no prepayment penalties, although some products may have limited penalties. These terms are fairly competitive and the large borrowing amounts are a nice touch, landing Newtek at 4.2/5 stars for this section.

Newtek also offers revolving asset-backed lines of credit that provide more flexibility for short-term financing needs. Funds can be used for short-term needs, such as paying taxes, meeting payroll, covering operational expenses, marketing costs, or paying off more expensive financing.

Newtek offers two lines of credit, both with funding available from $50,000 to $5 million.

The first is accounts receivable financing. You can receive an advance of up to 85% for invoices due within 30, 60, or 90 days out. Repayment terms are set at 12 months and are renewable.

The second option is an inventory-backed line of credit, with an advance rate of up to 50%, with your qualified, non-perishable inventory. Repayment terms are 12 months and are renewable. Most non-perishable inventory qualifies.

Newtek does not list interest rates for its financial products. However, the company does state that it has competitive interest rates. If you have a specific loan product in mind, you should be able to gain a general idea of the APR by speaking to a Newtek representative.

Newtek Application Process

To get started with Newtek, you’ll need to fill out the prequalification form on the company’s website. This form requires a fair amount of personal information, including first and last name, date of birth, company name, contact information, number of employees, and requested loan amount. You’ll also have to provide your Social Security number for a credit check, although Newtek does not reveal on its website what score is required to qualify for lending.

Once you submit the form, a member of the Newtek team will call to gather more information and discuss financial solutions for your business. You can also bypass the online form and simply connect with Newtek by phone or even by video.

You’ll be assigned a dedicated lending specialist who will complete all application documents with you. Prequalifications and time to fund are not disclosed. The lack of transparency regarding application approval and funding timelines and the lack of clarity regarding the application as a whole put Newtek at only a 1/5 star rating for this section. We’d like to see more information regarding the application timeline and a preview of what the application is like without having to fill out the pre-qualification form.

NewtekOne Sales & Advertising Transparency

Newtek offers only general information about the loans, financial products, and services it provides to small businesses on its website. That’s not completely unusual in the small business loan industry, where changing rates combined with factors like the applicant’s creditworthiness make it hard to deliver accurate information online.

However, many lenders provide at least a range or a general idea of what to expect, which Newtek is lacking. Additionally, there are several negative customer reviews regarding Newtek’s sales practices, resulting in only a 2.2/5 star rating in this area.

Newtek Customer Service & Technical Support

With many support forms available, Newtek makes it easy for prospective and current clients to get in touch. Although you can start the application process online, you also can contact Newtek by phone to prequalify or inquire about the company’s products and services.

You can send your questions or comments through email or start a live chat through the company’s website. You can also send inquiries or find out the latest news through Newtek’s social media profiles on Facebook, Twitter, and LinkedIn.

As you apply for funding from Newtek, you’ll be assigned a dedicated account representative who will help you throughout the loan process.

Newtek User Reviews

Although it’s easy to find both negative and positive comments from Newtek customers, it’s important to examine the company’s overall reputation. To that end, Newtek is accredited with the Better Business Bureau, where it currently has an A+ rating and a customer review composite score of 3.86/5. Those numbers represent an improvement from the time of our last review when BBB’s customer reviews gave Newtek 3.61/5 stars, and it is an even greater improvement from our review before which put Newtek at 1.61/5 stars.

However, there’s an interesting contrast between the BBB ratings and reviews on other customer sites which seem to be much more negative. On TrustPilot, Newtek gets 1.9/5 stars and on BestCompany, it gets only 1.2/5 stars, resulting in a composite score of 2.3/5.

Negative Newtek Reviews & Complaints

Many of the complaints posted online were about other products with the larger NewtekOne family of business products, such as insurance, banking, or merchant services. In the past, a significant portion of the negative lending reviews had to do with the Paycheck Protection Program (PPP). Here are the more recent complaints related specifically to Newtek small business funding, including these:

• Documentation Requirements: One of the most common complaints revolves around the documentation and paperwork requirements needed to receive a loan.
• Disorganization: Some customers complained that the paperwork sent to Newtek was lost and needed to be resent. Another complaint was confusion over what paperwork was needed and when it needed to be sent.
• Unresponsive Customer Service: More than a few customers said that they were unable to connect with their account reps, and, when they did, the reps were unhelpful.
• Lengthy Loan Process: Even though prequalifications can be received quickly, some customers complained about the time it took to complete the loan process.
• Unable To Meet Requirements: Some reviewers state that despite having high credit scores and solid credit histories, they were unable to receive financing through Newtek.

Positive Newtek Reviews & Testimonials

Satisfied Newtek customers are enthusiastically positive. Here’s a sampling of what they had to say:

• Speedy Service: Newtek isn’t the fastest online lender, but it’s pretty fast as far as long-term installment loans go.
• Reasonable Rates: One customer said they were very happy with the rate they received on their loan.
• Customer Service: Several customers spoke highly of the efforts of their Newtek representative, saying they appreciate the personal attention of a dedicated, professional, helpful, and knowledgeable rep.

Final Verdict Of Newtek Small Business Finance

Overall, Newtek offers a good amount of services, strong borrowing amounts, and decent customer service. The main marks against the company are its lack of transparency regarding borrowing requirements and the application process, as well as a large handful of negative reviews. Even though BBB reviews have improved, the presence of so many negative reviews on third-party sites isn’t something we take lightly.

Fortunately, you can count on receiving full disclosures after you prequalify for Newtek financing and a dedicated support rep to walk you through this process is a plus. If you’re interested in learning more about a potential Newtek loan, you can inquire by phone or online to find out more about what Newtek has to offer, potential costs associated with its financial products, and borrower requirements to determine if this lender is the right fit for your small business.

On the other hand, if you’d like to keep looking for a lender that might suit you better, check out our list of the best business lines of credit or the overall best small business loans. If your credit is less than stellar, don’t worry, because we’ve got options for you, too. For example, you can apply for a loan that doesn’t require a credit check.

Another note worth mentioning is that Newtek is historically not a good choice for startup funding. In the past, successful Newtek lending applicants had to have a minimum of two years in business. If yours is a newer business, you’ll have to look elsewhere for startup loans.

Whatever you decide to do, remember that you’ve got options. Take your time, do your research, read user reviews, and talk to company representatives before you decide. The right business loan for you is out there, and we wish you the best in your search to find it!

Business Loan & Funding Products Review Methodology

Merchant Maverick has been researching and reviewing business lenders since 2015. Our writers have tested over a hundred different funding products, including traditional term loans, online loans, lines of credit, start-up loans, merchant cash advances, and equipment financing. In each review, we evaluate rates and fees, services, eligibility requirements, application process, sales and advertising transparency, customer service, and user reviews.

Read more about how we rate business loans and funding products.

When comparing different lenders and loan products, we consider many data points, including the ease and transparency of the application process, interest rates, repayment structure, sales ethics, time to funding, revenue and time in business qualifications, and credit score requirements. Our lists of the best funding products include only those we’ve deemed worthwhile from multiple vantage points, and often share qualities such as widespread accessibility across fifty states, low rates, flexible requirements, and competitive borrowing amounts.

We spend an average of 10-15 hours researching and updating each one of our lists, making sure the loans and funding products included meet our internal standards for quality and reputation.

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