Products

SBA 7(a) Loan Program
SBA 504 Loan Program
Conventional Real Estate Loan Program
Loan Portfolio Servicing
Accounts Receivable Financing
Lines of Credit

SBA 7(a) Loan Program

7(a) loans are only available on a guaranty basis, provided by lenders who are licensed by the SBA and choose to structure their loans by SBA's requirements. The SBA does not fully guarantee 7(a) loans. The lender and SBA share the risk that a borrower will not be able to repay the loan in full. The guaranty is a guarantee against payment default. It does not cover imprudent decisions by the lender or misrepresentation by the borrower. Newtek provides SBA 7(a) loans according to the following guidelines.

	Business Size Standards

Industry Type	Average Employees (12 months) or Average Sales (3 years)
Manufacturing	500 - 1500 employees
Wholesaling	100 employees
Services	$4.5 Million to $31.5 Million
Retailing	$6.5 Million to $26.5 Million
General & Heavy Construction	$18.5 Million to $31 Million
Special Trade Construction	$13 Million

Eligibility

Business must be operated for profit
Business must be open to all on a non-discriminatory basis
Business must be located in the US or its possessions
Owners must be US citizens or resident aliens
Business must be able to demonstrate repayment ability from earnings
Business must not be involved in investment real estate, religion, politics or sex

Loan Terms

Loans range in size from $25,000 to $2,000,000
Loan terms range from 7 to 25 years based on the use of proceeds
- Owner occupied real estate -- 25 years
- Machinery & equipment -- 10-15 years
- Business Acquisitions -- 10 years
- Working capital -- 7 years
Loans are structured without balloon payments
Interest rates are floating, up to 2.75% over Prime
Personal guarantees are required from any owner of 20% or more of the business
Collateral includes all business assets and may also include personal assets

Use of Proceeds

Open, expand or acquire a business or franchise. Start your own business, acquire 100% of an existing business or pay fees to start a franchise.
Finance business expenses (working capital). Pay salaries and vendors, purchase inventory, advertise, finance receivables, pay bookkeeping and legal fees and/or rent office space.
Purchase equipment. Purchase office equipment, computers, furniture, fixtures, manufacturing equipment and heavy machinery.
Purchase or improve owner-occupied real estate. Purchase or construct buildings, make leasehold improvements, expand or renovate facilities or purchase land. If purchasing, owner must occupy at least 51% of the real estate; if constructing owner must occupy at least 67%.
Refinance existing business debt. Improve cash flow by reducing monthly loan payments by at least 20%.

SBA 504 Loan Program

The CDC/504 loan program is a long-term financing tool that provides growing businesses with fixed-rate financing for assets such as land, buildings and sizable purchases of equipment.

Size Standards

Net Worth must not exceed $7.0 million
Average net income over the last 2 years must not exceed $2.5 Million

Eligibility

Business must be operated for profit
Business must be open to all on a non-discriminatory basis
Business must be located in the US or its possessions
Owners must be US citizens or resident aliens
Business must be able to demonstrate repayment ability from earnings
Business must not be involved in investment real estate, religion, politics or sex

Loan Terms

Loans are structured with no balloon payments
- Up to 50% 1st mortgage
- Up to 40% 2nd mortgage provided by Certified Development Company ($250,000 to $4,000,000
- At least 10% equity contribution
Interest rates are fixed based on current market rates
Loan term is based on use of proceeds
- 1st mortgage: Equipment -- 10 years; Real Estate -- 20 to 25 years
- 2nd mortgage: Equipment -- 10 years; Real Estate -- 20 years
Personal guarantees are required from any owner of 20% or more of the business
Collateral includes the real estate or machinery & equipment being financed

Use of Proceeds

Purchase or renovation and expansion of owner-occupied real estate
Purchase of machinery and equipment

Conventional Real Estate Loan Program

Loan Terms

Investor Properties:

Up to 90% financing
Loans up to $5 million
Terms up to 30 years
Less than 25% owner occupancy
Up to 15 tenants
Competitive fixed/variable rates
Multiple prepayment options

Owner Occupied:

Up to 90% financing
Loans up to $5 million
Terms up to 30 years
As little as 25% owner occupancy
Competitive fixed/variable rates
Multiple prepayment options

Use of Proceeds

Purchase or renovation and expansion of commercial real estate
Refinance or cash out/refinance of commercial real estate

Loan Portfolio Servicing

Newtek provides 4 different options for managing a business loan portfolio. You can:

Underwrite, Close and Service through Newtek
Underwrite and Close through Newtek
Underwrite through Newtek
Service through Newtek

Underwriting:

Each request for commercial financing is underwritten on a case by case basis. Every loan application is unique and evaluated on its own merits, but there are a few common criteria Newtek looks for in commercial loan packages.

Debt service coverage
Loan to value
Credit history of the business and its owners
Property Valuation

During this process, the borrower is asked to provide:

Copies of business and personal tax returns
Resume
Business plan for businesses less than two years old
Business organizational documents

Closing:

Loans typically close within 60-90 days from receipt of a signed approval letter from your borrower. Newtek takes care of all of the SBA paperwork if the loan is an SBA request. The closer will provide a checklist of all of the items needed to close the loan, and will work with your borrower to collect these items. The faster these checklist requirements can be met, the faster the loan can close.

The steps below are handled by Newtek:

Prepare approval letter, follow-up for signed approval letter, draft closing checklist
Prepare closing documents in conjunction with counsel
Collect required documents from borrower
Closing is scheduled at time and place convenient for borrower
Arrange funding with lender

Servicing:

Once a loan has been funded, there is still a lot of attention that goes into the maintenance of the portfolio. Newtek services your loan portfolios to ensure payments, financial statements, insurance renewals, annual reviews, collateral substitutions and other required actions are completed in a timely manner. Important servicing issues include:

Invoicing, collecting and processing payments, including 1502 reporting to the SBA
UCC and insurance renewals, receipt of financial statements, collateral substitutions and structure or name changes
Initial collection
Liquidation services, as required, including handling of work-outs and management of REO properties.

Accounts Receivable Financing

Accounts Receivable Financing allows business owners to leverage the balances their customers owe them to fund every day expenses. Rather than waiting 30, 60, or even 90 days to get paid, entrepreneurs may finance their receivables to get cash today.

Eligibility

Business is selling on terms to other businesses or consumers
Business and its customers must be located in the United States
Business does not have government receivables
Business is not engaged in construction related activity
Business does not have progress or project billings
Business is not selling on consignment or guaranteeing sales
Business does not have installment contracts or pre-billings

Terms

Facilities ranging from $10,000-$500,000 per month
Funding available for up to 90% of invoice value
Competitive Pricing
Personal Guarantees are required

Uses

Satisfy payroll needs
Reduce bad debts
Take advantage of trade discounts
Meet increasing sales demands
Improve cash flow
Extend credit to your customers