SmartBiz SBA Loan Review: Quick Financing for Small Businesses 2022

SmartBiz

SmartBiz offers low-cost SBA loans for company development or debt consolidation. Only well-established enterprises will be eligible.

Pros & Cons

Pros

  • Rates are competitive among internet loans.
  • Quicker than obtaining an SBA loan from a bank.

Cons

  • Strong financials, backed by personal and corporate tax records for the previous three years, are required.
  • Strict guidelines for the usage of revenues.
  • A company lien and a personal guarantee are required.

Review in Detail

SmartBiz makes obtaining a Small Business Administration loan, or SBA loan, simpler and faster than going via a regular bank.

SmartBiz might be a suitable match for your company if you:

If you need to refinance your debt or grow your company: consider the following: SBA 7(a) loans of up to $350,000 are available through SmartBiz at annual percentage rates ranging from 6.73 percent to 10.29 percent.

If you want to finance a real estate transaction: SmartBiz provides SBA 7(a) commercial real estate loans ranging from $500,000 to $5 million with APRs ranging from 5.04 percent to 5.09 percent.

Need money in a hurry: The firm can finance loans in as little as a week, but it usually takes longer.

Have a well-established company: Regular SBA 7(a) loans need a minimum of two years in the company and $50,000 in yearly income.

Why to use SmartBiz

Low-cost borrowing

It would be difficult to top SmartBiz’s cheap SBA financing rates, which vary from 6.73 percent to 10.29 percent for standard term loans and from 5.04 percent to 5.09 percent for commercial real estate loans. SmartBiz’s online platform simplifies the process and reduces application time from months for a conventional bank to as little as a week.

Financing for expansion and other requirements that is manageable

Whether you want to expand your inventory, purchase new equipment, or recruit additional personnel, an SBA loan from SmartBiz may assist you. You acquire the cash you need on reasonable repayment terms and at relatively low interest rates, which makes it a potentially feasible choice for refinancing higher-interest debt.

Low-cost financing for commercial real estate purchases

In addition to regular term loans, SmartBiz provides 7(a) SBA-backed commercial real estate financing ranging from $500,000 to $5 million. These loans are a wonderful alternative for company owners wishing to acquire commercial real estate or refinance a commercial real estate loan since they have low borrowing fees and no balloon payments. Commercial real estate financing from SmartBiz cannot be utilized for new development. The interest rate on the loans, which have a period of 25 years, varies from 5.04 percent to 5.09 percent. According to the lender, additional costs may apply based on the property type and other criteria.

For commercial real estate financing, at least 51% of the property being purchased must be occupied and utilized by your firm. According to SmartBiz, its partner lenders normally ask a 15% down payment, while a 10% down payment “with extra collateral” may be acceptable.

A prepayment penalty applies during the first three years of a 25-year commercial real estate loan. If you repay the loan in the first year, you must pay 5% of the loan amount, 3% in the second year, and 1% in the third year. After the third year, there are no prepayment penalties for the remainder of the loan’s term.

SmartBiz’s commercial real estate financing requires the following minimum qualifications:

  • Personal credit score of 675+
  • At least two years of experience in business.
  • Annual revenue of $50,000 or more.

The marketplace connects borrowers and lenders

SmartBiz’s platform is a marketplace where your application is compared to the credit standards of SBA recommended lenders; it presently has eight bank partners. The benefit, according to the business, is that it can match you to the bank most suited to your demands, increasing your chances of approval.

SmartBiz also provides a free online tool called SmartBiz Advisor, which indicates your likelihood of loan acceptance and provides recommendations on how to improve your chances of approval. The program delivers specific insight into parameters utilized by lenders to assess your company, such as debt coverage, debt consumption, and business income patterns.

SmartBiz’s shortcomings

Not for business with shaky financials

A SmartBiz loan does not need a very high personal credit score, but it should be enough.

If you have limited or bad credit, explore the following alternatives for funding your company needs:

Consider an SBA microloan of up to $50,000 if you just want a little quantity of funding.

New Business Requirements

Your company must be in good financial condition, with no bankruptcies in the previous three years and a track record of paying debt commitments.

Fees are somewhat higher

SmartBiz takes a 4% cut on the approved loan to pay “referral and packaging fees,” and passes on bank closing expenses to the borrower for an SBA (7) loan. According to SmartBiz, such bank closure expenses typically total $450 and include ordinary bank fees. A bank term loan may cost you up to 6% in referral and packaging fees, as well as $200 to $300 in bank closing expenses.

You must still get the SBA’s approval

SmartBiz has discovered a technique to expedite the application and approval process for an SBA loan. However, you must still fulfill the SBA’s criteria, which might be daunting. The SBA even has a list of small firms that should not apply, including those engaged in religious instruction, life insurance, mortgage servicing, and real estate development.

‘Fast’ can vary

Despite the fact that SmartBiz has shortened the SBA loan procedure, approval may take longer than it would at other online small-business lenders, some of which do not demand as much proof as SmartBiz.

Commonly Asked Questions:

What is SmartBiz?

SmartBiz is an online lender for SBA loans in the United States. The organization is not a direct lender. Rather, it assists small companies in applying for loans via its network of partner banks.

What are SBA loans?

SBA loans are small-business loans that are partially insured by the US Small Business Administration and are made available by participating lenders. Advantages may include higher borrowing limits and reduced interest rates as compared to non-SBA loans.

Are SBA loans hard to get?

SBA loans might be difficult to get. Lenders often expect a high personal credit score, significant yearly income, and at least many years of operational experience. Lenders may also request collateral to secure the SBA loan, as well as a down payment.


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