NewBank Small Business Loan Review
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When other banks cut back lending during the 2008 economic crisis, NewBank filled the void and began specializing in small business loans through the SBA. NewBank offers those loans starting at $50,000. They provided about 150 loans in 2014, averaging about $1 million each. The financial assistance covers a range of small businesses including supermarkets, laundries, restaurants and other retailers, builders, and a physician in who wanted to buy a new office.
Understanding Your Loan Options
SBA lending minimizes the risk of default for NewBank. The SBA backs loans at the rate of 90%, and the bank vows to uphold the SBA’s standards for loan status.The bank only offers the two main traditional SBA loans, the secured loan through SBA 7(a) for any business expenses and the unsecured 504 for equipment and real estate that is made without security.. The financial assistance covers a range of small businesses including supermarkets, laundries, restaurants and other retailers, builders, and a physician in L.I.C. who wanted to buy a new office.
In 2014, NewBank lent $150 million in SBA-backed loans in the New York City metro area. About 80 percent of the capital went to New York City based businesses and 20 percent to New Jersey. Because the product has been successful, NewBank has stepped up lending even more since that time.
Speed of Implementation and Loan Duration
The truth of the SBA loan used to be that it could take up to 64 days after the prospective buyer turned in all their paperwork before an actual check could be issued. The status of Preferred Lender (a SBA Lender Program) allows the bank to make all the decisions through the closing, shortening the time considerably for applying for those loans.
There are definitely small differences in the expense and quality of service between banks, but it is very difficult to be specific without going through the pre-approval process. The length of time to apply and get the loan is completely dependent on the amount of time it takes the borrower to get their paperwork together and into the bank.
Fine Print and Final Thoughts
The fact that NewBank will be both the lender and servicer of your loan is a valuable commodity in and of itself. The complications that can form after a loan is approved and granted really calls for a consistency of care and advice across all the transactions involved.
Anne is a Senior Author for SBL. She began her career as an independent consultant for local businesses after graduating with a BA in Management. Since that time, she’s expanded to writing as well as consulting to spread helpful knowledge to small business owners across the country.