The SmartBiz network of banking partners also offers bank term loans for small businesses who don’t qualify for SBA loans, or who need funds more quickly than the SBA approval process allows.
Consider SmartBiz if you:
- Can wait a few weeks for a cash-flow injection
- Require funds to expand or refinance your business
- Plan to finance a business real estate purchase
- Have 2+ years in operation and $50,000+ in annual revenue
SmartBiz SBA 7(a) Loans
SmartBiz and its banking partners participate in the Small Business Administration’s 7(a) loan program, which is the SBA’s primary program for helping small businesses obtain financing. Through this program, SmartBiz facilitates two main types of SBA loans:
- Loans for working capital or debt refinancing
- Loans for commercial real estate
SmartBiz SBA 7(a) Loans for Working Capital or Debt Refinancing
SmartBiz SBA loans provide inexpensive financing for working capital and debt refinancing. Rates range from an APR of 9.54% to 10.78%.
Fees include a one-time 2% referral fee and a one-time 2% packaging fee of the borrowing amount. Loans incur a guarantee fee between 1.7% and 2.25%, based on loan size. Bank closing costs, including standard bank fees, average $450, plus any applicable third-party report charges.
SmartBiz working capital and debt refinance loans carry no prepayment penalties.
SmartBiz SBA 7(a) working capital or debt refinancing loans might be a good match for your business if you’re seeking to borrow a moderate amount on favorable long-term repayment terms:
- Loan Amount Up to $350,000
- Repayment 10 years
- Interest Rate Variable, prime rate + 3.75% for loans up to $49K*
- Collateral Personal guarantee, lien on business assets
* Prime rate + 2.75% for loans up to $350K
SmartBiz SBA 7(a) Loans for Commercial Real Estate
SmartBiz SBA loans also provide affordable financing for loans for commercial real estate. Rates range from an APR of 7.12% to 7.16%.
Fees include a one-time referral fee and a one-time packaging fee, both calculated at a maximum of 0.5% of the loan amount. Loans of up to $5 million require a guarantee fee ranging from 3.0% to 3.75%, depending on the loan amount. This fee is paid to the Small Business Administration. Bank closing costs average $5,000, including standard bank fees, appraisals and title fees, plus any applicable third-party report fees.
Real estate loans carry prepayment penalties for the first 3 years:
- 5% for the first year
- 3% for the second year
- 1% for the third year
- No penalties after the third year
SmartBiz SBA 7(a) commercial real estate loans can be a good option if you need to borrow a large amount on favorable long-term repayment terms:
- Loan Amount Up to $5 million
- Repayment 25 years
- Interest Rate Prime rate + 1.5% – 2.75%
- Collateral Personal guarantee, lien on the real estate
The SmartBiz Lending Experience
The SmartBiz online platform uses technology to provide a smooth and fast SBA lending experience. The company’s software asks some basic questions to see if you meet minimum requirements. This involves doing a soft pull on your credit report, which does not impact your credit score.
The software then matches you to a network of eight different banks, increasing your odds of finding a lender willing to finance you. An online finance tool actually shows your odds of getting approved. You can see your odds of getting approved within a few minutes of answering an online questionnaire, in contrast to the traditional SBA loan process where you need to virtually complete your loan package before you can evaluate your eligibility.
Once you get matched with a lender likely to approve your application, the software requests a hard pull on your credit report, which will appear on your report and can impact your score. If you get approved to proceed beyond this initial stage, you get matched with a personal relationship manager who can assist you in completing your application and answer questions.
This tech-assisted approach can speed up the early phases of the approval process. However, SmartBiz also requires more documentation than some lenders, which can slow down other parts of the process. The larger your loan request, the more documentation you usually need. Some loans get approved within as little as a week, but most take between a week and three months.
- Offers extremely affordable financing, with APRs from 9.44% to 10.78% for working capital and debt refinancing and 7.12% to 7.18% for commercial real estate
- Provides manageable funding for hiring workers, adding inventory, buying equipment or purchasing real estate
- Allows you to quickly evaluate the viability of loan opportunities
- Increases your odds of finding the right lender
- Provides both automated and personalized support
- Requires strong credit
- Revenue requirements may be too high for some start-ups
- Documentation requirements may slow down the tail-end of the approval process
- Requires SBA approval
- Referral and packing fees may be slightly higher than the traditional approval process
SmartBiz Loan Requirements
To qualify for SmartBiz loans for working capital or debt financing, you must meet the following minimum requirements:
- Business type: For-profit
- Business ownership: All owners must be U.S. citizens or legal permanent residents without criminal backgrounds or defaults on government-backed loans
- Liabilities: Business must not have open tax liens or a bankruptcy or foreclosure in the past 3 years
- Time in business: 2 years
- Personal FICO credit score: 650
- FICO Small Business Scoring Score (SBSS): 150
- Business revenue: Sufficient cash flow to support loan repayments
To qualify for commercial real estate loans, you must meet these minimum requirements:
- Time in business: 3 years
- Personal FICO credit score: 675
- Business revenue: Sufficient cash flow to support loan repayments, demonstrated by 3 years of tax returns and interim financial data
- Property: Real estate must be 51% owner-occupied
SmartBiz Funding Application: What You Need to Apply
To apply for an SBA loan through SmartBiz, you typically need certain required documents:
- Personal and business tax returns from the last 3 years
- Personal financial statements from every individual owning 20% or more of the company
- Profit and loss statements
- Balance sheets
- Collateral in the form of personal guarantees and liens on business or real estate assets
- Other documents varying with loan type and amounts, such as articles of incorporation, business licenses and commercial leases.
Final Say: SmartBiz SBA Loans
SmartBiz loans reviews generally give the company a high rating. For instance, the Better Business Bureau gives SmartBiz an A+ rating, with an average customer review of 4.5 out of 5 stars.
Most of the relatively few customer complaints about SmartBiz regard issues built into the SBA loan process, such as the amount of paperwork that needs to be filled out. Also, the ability to see your odds of getting a loan at the onset of the process can set you up for a disappointment if you get rejected after initially appearing eligible.
But nobody said getting an SBA loan is easy or without risk of rejection. SmartBiz does a good a job making the process easier and increasing your odds of success.