Small Business Term Loans
The Small Business Authority is an active Commercial Lender and owns Newtek Small Business Finance, Inc., one of only 14 national, nonbank Small Business Loan Corporation licenses, with the added distinction of maintaining a “Preferred Lender” status. Under this license, our affiliate originates and services SBA 7(a) loans throughout the United States. Our loan servicing portfolio includes these and other loans in every state except Hawaii, and it encompasses more than 150 industry types throughout the U.S.
With experience gained from its own portfolio, our affiliate provides expert Third-Party Loan Servicing of government-guaranteed and conventional commercial loans originated or acquired by others.
We provide four options for managing a business loan portfolio. You can:
1. Underwrite, close, and service through Newtek Small Business Finance, Inc.
2. Underwrite and close through Newtek Small Business Finance, Inc.
3. Underwrite through Newtek Small Business Finance, Inc.
4. Service through Newtek Small Business Finance, Inc.
Underwriting
Each request for commercial financing is underwritten on a case-by-case basis. Each loan application is unique and evaluated on its own merits, but there are a few common criteria that Newtek Small Business Finance looks for in commercial-loan applicants:
- 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:
1. Copies of business and personal tax returns
2. Résumé
3. Business plan for businesses less than 2 years old
4. Business organizational documents
Closing
Loans typically close within 60-90 days of receipt of a signed approval letter from your borrower. The Small Business Authority’s licensed affiliate takes care of all of the U.S. Small Business Administration paperwork if the loan is a U.S. Small Business Administration 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 us:
1. Prepare approval letter, follow up for signed approval letter, draft closing checklist
2. Prepare closing documents in conjunction with counsel
3. Collect required documents from borrower
4. Schedule a closing at a time and place convenient for borrower
5. 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 Small Business Finance service your loan portfolios to ensure that 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 U.S. Small Business Administration
- 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
Highlights of The Small Business Authority Loan Servicing Program include:
- The Small Business Authority’s affiliate is rated by Standard & Poor’s as a Commercial Loan Servicer/Special Servicer for Third-Party Loan Servicing of small balance ($50,000 to $10 million) “conventional” loans, U.S. Small Business Administration Loans originated in the 7(a) and Express Loan programs, and other government-guaranteed loans from programs originated by the USDA and other agencies. Clients include financial institutions, credit unions, and the Federal Deposit Insurance Corp.
- The Small Business Authority’s affiliate utilizes the PCFS 2000 “Loan Manager” Loan Servicing System, a leading Loan Servicing Platform in the industry configured for commercial loan servicing, with upload capacity in excess of 25,000 loan assets. The system delivers multiple platform accrual and nonaccrual accounting to meet all client requirements. “Loan Manager” tracks loans involving multiple participants and provides accounting for all participants.
- Platform features include automatic accrual of administration fees, Variable or Fixed Rate Accounting, Split Rate Accounting, Work-Out Loan Accounting, Shadow Accounting, Automatic Re-Amortization of Loans, Amortization of Loan Acquisition Costs, and Deferred Expenses and Loan Sale Accounting.
- Required government reports include Colson Settlement (U.S. Small Business Administration Form 1502 and Electronic Media Report), U.S. Small Business Administration Form 172 Transaction Report of Lender Serviced Loan, U.S. Small Business Administration Form 1050 Settlement Sheets for Loan Disbursements and all Management Reports and Customer Notices, plus many specialized reports to met specific client needs.
- Newtek Small Business Finance is fully compliant in all aspects of lending and loan servicing. In addition to its S&P Rating and federal contract awards, Newtek Small Business Finance is examined regularly by the U.S. Small Business Administration and its compliance agents. Each examination reviews the company’s capital access, asset quality, earnings, liquidity, and management. The Small Business Authority’s affiliate has consistently been found to be fully compliant in all aspects of these examinations. Further, as a publicly traded company, Newtek Business Services, Inc., The Small Business Authority, meets all SEC and FASB requirements.
- Our lending affiliate supports all “Special Servicing” functions, including workout, liquidation, disposition through sale, bankruptcy, and foreclosure, and provides post-foreclosure disposition of collateral for serviced assets, including all related functions such as collateral preservation, insurance and tax compliance, marketing, and sales.
- The Small Business Authority offers a diversified suite of Payment Processing alternatives to meet the needs of its clients and borrowers.
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.
