SmartBiz is an innovative SBA 7(a) lending platform that utilizes technology to make it easier to apply for a small business loan. Like all the companies we reviewed, SmartBiz conforms to the regulations established by the Small Business Administration, and its banking partners are SBA preferred lenders. SmartBiz automatically deducts your monthly repayment from your bank account, which ensures that your payments are made in full and on time.
This company estimates that a third of its customers are women who own their own businesses, and it facilitates small business financing for a wide variety of industries, including restaurants and retail as well as businesses that offer professional services, such as those for doctors and veterinarian offices. It works with businesses in all 50 states.
SmartBiz's SBA 7(a) loan sizes start at $30,000 and go up to $5 million. As with most of the lending companies we reviewed, the interest rate is variable and based on prime. SBA 7(a) loans for commercial real estate, with larger loans of $350,000 to $5 million, have interest rates of prime plus 1.50% to 2.75%, among the best in our review. Smaller SBA 7(a) loans, ranging from $30,000 to $350,000, are express loans, and interest rates are still capped by the SBA, but are higher, at prime plus 2.75% to 3.75%. The debt service coverage ratio required by SmartBiz varies, though its eligibility requirements state that your cash flow must be high enough for you to meet your debt payments.
Like all the lenders we reviewed, SmartBiz considers both your business and personal credit histories, and it requires a personal guarantee from anyone who owns 20% or more of the business. It requires you to have good credit, with a personal score of 650 or better, no bankruptcy or foreclosures for the past three years, and no open tax liens or settlements.
SBA 7(a) loans are highly regulated, so they have fewer fees than many other types of loans, but you can still expect to pay the SBA guarantee fee if your loan is more than $150,000. Other fees you can expect to pay include referral and packaging fees and closing costs. The referral and packaging fees are calculated as percentages of the loan amount and, depending on your loan size, may end up being higher than the flat packaging fees that some lenders charge. The estimated closing costs are $450, which is extremely reasonable.
SmartBiz is very open with its information, both online and over the phone. Its website posts the interest rate range, terms, fees, collateral requirements and details about what you can use the loan proceeds for, as usage varies depending on the size of the loan. When we called, the company representative was very knowledgeable and answered our questions without screening the call or forwarding it to a loan officer.
One of the best things about SmartBiz is the simplified application. If the idea of creating a business plan or coming up with projections makes you wonder how you're ever going to get business financing, SmartBiz's application is a great option for you, since it enables you to skip this step. Additionally, the approval process is faster than other lending services' approvals because SmartBiz uses technology to underwrite and originate the loan. After you've completed the online application and uploaded all required documentation, SmartBiz can determine whether you meet prequalification requirements in approximately five minutes and approve your application in up to 48 hours. After your loan application is approved, you can receive business funding in as little as seven days.
Although several lenders provide the application form and required documents on their websites for you to download, SmartBiz has a fully online application. It provides a list of the personal and business information you need, which can serve as a handy checklist that you can use to gather your documentation before you begin your application. Even though the application is online, the company provides you with a loan consultant who is available to assist you throughout the loan process. SmartBiz's website includes FAQs and a blog with helpful articles and tips.
SmartBiz is among the best small business loan providers we reviewed because it makes it faster and easier to get an SBA 7(a) loan. In addition to its simplified process and accelerated turnaround, the company is transparent with its rates, fees and terms, both online and over the phone. However, SmartBiz charges referral and packaging fees; although they're allowed by the SBA, not all loan services charge these fees.
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