Business Lending FAQs


How does the program work?

The U.S. Small Business Administration guarantees a percentage of the loan, rather than actually providing the money. With the U.S. Small Business Administration’s guarantee, lenders grant loans they may not otherwise consider. Our affiliate provides you with the capital and, as your lender, our affiliate processes and services your loan, answer your questions and maintain a relationship with you over the term of the loan.

What can the loan money be used for, and for how long?

Whether you already own a business or you’re starting, expanding or purchasing one, you can use the funds:

  • To provide working capital—term up to 10 years.
  • To purchase equipment or inventory, refinance or acquire a business, or for leasehold improvements—term up to 10 years.
  • To purchase real estate—term up to 25 years.

How much can a business borrow?

Under the SBA 7(a) program, you can borrow from $50,000 to $10 million.
Under the SBA 504 program, you can borrow from $500,000 to $10 million.

What fees are involved?

The U.S. Small Business Administration charges a one-time guarantee fee that ranges from 2 to 3.75 percent of the guaranteed loan amount. These fees can be incorporated into your loan proceeds.

Is financing available to startups?

Yes. The U.S. Small Business Administration’s less stringent requirements for owners’ equity and collateral and the longer terms at better interest rates make the SBA 7(a) program an excellent option.

Can SBA 7(a) loan proceeds be used for salaries, operating expenses, and working capital?

Yes. Proceeds can be used to fund these items.

How long will it take to get my loan approved?

Once you have submitted a complete loan package, an approval can usually be obtained in five to seven business days.

How long for disbursement?

Depending on the complexity of the loan, the time frame from application submission to disbursement of funds takes approximately 30-60 days.

How does a business plan factor into the application process?

Business plans are critical for startup businesses. The U.S. Small Business Administration program requires a business plan as part of the application process, and we can assist you in writing one.

How do you view below-standard credit ratings?

Although we do look for strong personal credit ratings from all owners and guarantors of the loan, we will work with those who have below-standard credit ratings to see if there are logical and sufficient reasons to explain the present ratings.

Why should I use Newtek for accounts-receivable financing?

Instead of waiting 30, 60, or 90 days or more to be paid by your customers, you can receive instant cash flow on your receivables. In turn, your accelerated cash flow can be used to improve your company’s credit rating, gain increased purchasing power, and enhance production and sales.

What are the requirements?

Our criteria are simple. The work, product, or service must be completed, delivered, and accepted. We accept accounts that you consider creditworthy. However, if there’s any doubt, our credit-checking services are available.

What happens if my customer is unable to pay?

If an account is deemed uncollectable, we will continue to bill and under your guidance, pursue collections. Various recourse programs are available for you.

Will working with Newtek jeopardize my relationship with my customers?

No. Based on the Newtek program setup with your company, all statements sent to your clients feature your company trademark or logo. You never lose your identity.

Can I use my existing software?

Newtek has an extensive programming department whose sole focus is integration. What this means is that if you use a standard accounting package—QuickBooks for example—or an industry-standard point-of-sale system, Newtek can integrate with it!

Who mails the statements to my customers?

Newtek does! On a monthly basis, Newtek mails statements that feature your trademark or logo. You maintain control of your accounts. Your individual identity is always protected. As an added service, Newtek will insert your advertising material in your statements and track frequent shopper purchases.

Where do my customers make their payments?

Newtek will arrange to have your customers make checks payable to you and send them to our lockbox.

Does a company have to be profitable to qualify?

Not always—some clients are new companies that have not yet turned a profit, or they have suffered recent financial losses. Newtek looks at the quality of a client’s customers rather than its specific financial condition.

How long does the closing process take?

A typical deal can be closed and funded within 10 days of the initial package. In some cases, a closing can be expedited.

What industries will Newtek purchase accounts receivable from?

Almost all industries. Clients that sell services or goods and have account debtors (customers) with good credit are eligible.

Can a company with a limited credit history qualify?

Yes, as long as the company has creditworthy customers.

Is there a minimum volume of receivables that needs to be committed?

In most cases, Newtek will look for a minimum monthly volume of at least $10,000.

Who provides the advance?

Newtek works with a number of third-party providers to ensure you are offered the best terms available in the market.

How can I use the cash?

Use the cash any way you see fit. Customers typically use the cash to support or upgrade their businesses in some way. Maybe you need repairs or inventory. Maybe you would like to expand your present location or simply add a new location. Better still, maybe you’d like to seize an opportunity in your marketplace before a competitor does.

How does funding and repayment work?

Once approved, the capital is deposited directly into your bank account. Payback of the advance is made through regular automated deductions of an agreed-upon percentage of your net settled credit card batch until advance is satisfied.

Will I qualify?

If you’ve been in business for over a year and process at least $3,500 in credit card sales each month, you are well on your way to approval.

How long will I have to wait to find out if I have been approved for my Merchant Cash Advance?

Preapproval is usually obtained within 24-48 hours. Funding can take as few as two business days, depending on the amount of the transaction and the time it takes to get the necessary documents required to fund.

How much can I qualify for?

Your monthly credit card volume will qualify you for $3,500 to $250,000 per location. The amount of receipts purchased is determined by your average Visa/MasterCard processing volume over a three-month period.

How soon can I have the cash?

After a complete contract is approved and executed, funding will be available as soon as your merchant processing account is converted and the Merchant Cash Advance provider sees two days of net settlement.

Do I have to switch credit card processors, and will I receive the same low rates as my current credit card processor?

To be eligible for a cash advance from our providers, you must utilize Newtek for your processing. Newtek is a full-service merchant credit card processor. We will work with you to meet or beat your current credit card processing agreement. A representative will conduct a processing analysis and present you with proposed credit card processing rates.

All loans made or serviced under the SBA program (U.S. Small Bus Administration) are made by our lending subsidiary, Newtek Small Business Finance, Inc., a licensed U.S. SBA lender.

Call and Speak with a Specialist & Get Your Questions Answered: 1-855-763-9835