Wondering how to get an SBA loan? Click here to get our FREE Guide:
How to Apply for an SBA Loan
What are They?
Provider of 10 year SBA loans.
How popular is it?
SmartBiz has done over $100 Million in SBA loans.
Who will qualify for a loan?
Must be in business for at least 2 years, must be cash flow positive, and have a credit score of above 600 for loans under $150K and above 650 for loans over $150K. (Check your credit score here for free.)
Who are they right for?
Businesses that qualify for an SBA loan and need money quickly.
Trusts, non-profits, gambling, lending, insurance, religious teaching, certain adult-related businesses, primarily political and lobbying activities, oil wildcatting, mining, mortgage servicing, real estate development, bail bond, pawn or private clubs.
Personal Guarantee required?
A lien is placed on general business assets for loans between $30K and $150K. A lien and specific collateral are required for loans above $150K.
For loans of $150K and less, you can get pre-approved in 30 minutes and have the funds in as little as 7 days. Larger loans typically take 4-6 weeks.
Where do they lend?
All 50 states.
How much do they lend?
From $30K to $350K.
How much can I qualify for?
SmartBiz typically provides loans up to 10% of your business’ annual gross revenue.
For how long?
All SmartBiz loans are 10 year loans but you can pay off early with no pre-payment penalties.
Cost/Interest rate of loan?
The Annual Percentage Rate currently ranges from 7 % to 9 % (see cost section for more information).
How do payments work?
Fixed payment is automatically debited from your bank account on a monthly basis.
A variety of personal and business information and documents (such as tax returns and management team info) are needed. The larger the loan, the more documents that are needed. View the list here.
No Data Available.
SmartBiz makes it fast and easy to obtain an SBA loan. Obtaining an SBA loan through SmartBiz has the following benefits:
- Low interest rates. Loans backed by the U.S. Small Business Administration (SBA), have interest rates that are multiple times lower than those offered by alternative lenders like Kabbage, OnDeck, and CAN Capital. An SBA loan will probably give you the lowest interest rate that your business can qualify for.
- Long repayment terms and no pre-payment penalty. SmartBiz issues loans for 10-year terms, but you can pay off your loan sooner with no pre-payment penalties.
- Range of loan sizes. You can borrow as little as $30,000 or as much as $350,000 through SmartBiz. Banks usually don’t grant SBA loans for small amounts of money, so SmartBiz is an option in that regard.
- Fast access to funds. If you get a loan through SmartBiz, you can get approved and access your funds in as few as 7 days for loans under $150K. Banks can take up to 4 months to issue SBA loans. Loans larger than $150K take 4-6 weeks with SmartBiz, but this is still much faster than a bank.
The drawback to SmartBiz is that it can be difficult to qualify for an SBA loan. You must have been in business for at least 2 years, your business must be cash flow positive, and you must have a credit score over 600. If you can meet these requirements, you can save money and quickly get a loan through SmartBiz.
If you’re not familiar with SBA loans, check out our guide.
- Credit Score: At least 600 for loans under $150,000 and at least 650 for loans above $150,000. You will also need a SBSS Score of 150 or higher. SBSS Score, which is sometimes also called a liquid credit score, is a hybrid score that takes both personal and business credit into account. You can check your personal credit score, business credit score, and SBSS Score at Nav.
- Years in Business: At least 2 years.
- Revenues: You must be cash flow positive with a debt-service coverage ratio of at least 1.
- Industry Exclusions: Trusts, non-profits, gambling, lending, insurance, religious teaching, certain adult-related businesses, primarily political and lobbying activities, oil wildcatting, mining, mortgage servicing, real estate development, bail bond, pawn or private clubs.
- Other Qualifications: U.S. based business, owned by US citizen or lawful permanent resident, owners are at least 21 years old, no bankruptcies in last 3 years, no current charge-offs or settlements, current on government loans, no more than 2 misdemeanors. See full requirements here.
Collateral Required? Depends on your loan amount. Smartbiz places a blanket lien on your business assets for loans between $30K and $150K. Both a lien and specific collateral are required for loans above $150K. It is legally more difficult for a lender to collect on a lien than it is to claim specific collateral. From a borrower’s perspective, however, the effect is the same. If you don’t pay back the loan, SmartBiz can sell off your business assets or collateral to satisfy the loan. Also, be careful because a lien can affect your ability to get additional financing.
Does the loan require a personal guarantee – from whom? Yes. Pursuant to SBA requirements, SmartBiz requires a personal guarantee from every person who owns 20 % or more of the business. A personal guarantee means you are individually accountable for repaying the loan, even if your business closes down. The lender can come after your personal assets (e.g. car and house) if you don’t pay the loan.
Upfront Fees –
- Referral/packaging fee: SmartBiz charges 4% of the total loan amount as a referral/packaging fee. This is taken out when the loan is made (e.g. if you borrow $100,000 then you will receive $96,000 in your account once the loan closes).
- Guarantee fee (paid to the SBA): The fees is waived for loans under $150K. 2.25 % of the total loan amount is charged for loans above $150K.
- Closing costs: Approximately $317.
Structure of Debts: Traditional term loan.
Servicing Fees: None.
Are interest rates variable? Yes. The interest rate on SmartBiz’s SBA loans is variable based on changes in market rates. Loans have a variable prime rate plus 2.75 % to 3.75 %. The prime rate, which is a consensus interest rate set by the largest American banks, is currently 3.25% and varies over time. This brings the total interest rate on SBA loans to 6 % to 7 % (this isn’t the same thing as APR — see below). Our SBA loan calculator calculator shows you how the interest rate changes depending on how much you borrow and for how long.
Learn more about fixed vs. variable interest rates here.
How Loan Costs Work With SmartBiz
If you are familiar with a home loan or credit card loan, you have likely heard interest rates on those loans quoted as an Annual Percentage Rate (APR).
SmartBiz quotes the cost of their SBA-backed loans as an APR. APR incorporates all the fees mentioned above and the interest rate and tells you the cost of the loan over one year, expressed as a percentage.
You can use the calculator below to estimate your APR and monthly payments on a SmartBiz loan:
Here is what the effective APR and monthly payments would be for different SmartBiz loan amounts. It’s a 10 year term in all cases, but you can pay it off early with no prepayment penalty.
- $30,000 = 8.10 % APR ($348/month)
- $50,000 = 7.06 % APR ($555/month)
- $100,000 = 6.98 % APR ($1110/month)
- $150,000 = 6.96 % APR ($1665/month)
As you can see from these examples, you are paying about 7 % APR on the low end and 8 % APR on the high end for a SmartBiz loan. All else being equal, a larger loan amount means lower interest. The interest charged by SmartBiz is slightly higher than a bank such as Celtic Bank would charge, but it is multiple times cheaper than the APRs charged by alternative lenders, such as OnDeck, CAN Capital, and Kabbage. Moreover, Celtic Bank and other banks generally don’t loan small amounts of money, whereas SmartBiz does.
In general, borrowing for less time saves you money. If you borrow $30,000 from SmartBiz and take the entire 10 year term to pay it off, you would have to repay $41,799 in total. If you pay off the $30,000 loan in just 1 year, you would only have to pay back $31,149.
SmartBiz’s goal is to streamline the process of applying for an SBA loan for less than $150,000. The process, which takes weeks or months at a bank, can take fewer than 7 days with SmartBiz (a more realistic time line for larger loans is under 30 days because it does take some time to gather all the paperwork you’ll need).
You begin by filling out a brief (takes about 5 minutes) questionnaire with your business and personal information and give authorization for a credit pull. If you pre-qualify based on your credit history, it takes about 30 minutes to complete the online application and upload documents. You are then instantly notified if you’re approved for a loan. SmartBiz will send you the loan agreement, and the funds will be available in your account for withdrawal in as little as 7 business days.
What documents need to be provided?
A variety of information and documents are collected during the application process. In general, larger loans require more documentation.
- Names of owners and ownership percentages
- Contact details
- Social security number
- Valid driver’s license or passport information
- Personal financial information
- Past tax returns
- Personal credit report
- Business name and contact details
- Type of business
- Date of inception
- Tax identification number
- Previous government loan history
- Management team information
- Business financial information
- Formation and other business documentation
- Past tax returns
- Business credit report
Do they need online access to any systems – Quickbooks, PayPal, bank accounts? Yes, they need access to your business bank account.
Is there a credit report pull? If so at what point in the process? Yes, but the credit pull during the pre-approval process is a soft credit pull, which means it will not impact your credit score. A hard credit pull is only conducted later in the process if you are pre-approved and your loan is highly likely to be funded.
If so – What credit reporting service do they use? Experian.
Does SmartBiz report to the credit bureaus? SmartBiz reports only to the business credit bureaus, not to consumer credit bureaus. This can help you build business credit, potentially making it easier to receive favorable financing terms in the future.
Loan Sizes and Terms
What is the minimum / maximum length of loan? SmartBiz gives 10-year loans, but you can pay off a loan early with no prepayment penalty.
What is the minimum / maximum amount of the loan? The minimum amount is $30,000, and the maximum amount is $350,000.
Payment Methods & Schedule
- Schedule of Payments: Monthly.
- Payment Initiation: Fixed payment is automatically deducted from your bank account by SmartBiz’s partner bank.
- Method of Payment: ACH
- Penalties for Missing Payments: This depends on which of SmartBiz’s lending partners you are matched with. Pursuant to SBA rules, late or missed payment penalties can only be charged when a borrower is more than 10 days delinquent and cannot exceed 5 % of the regular monthly loan payment.
- What Happens on Pre-Payment? There is no pre-payment penalty. You save money when you borrow for less time.
SmartBiz has has phone and email customer support for borrowers and applicants. There is an FAQ page as well.
US-based or International? US-based. SmartBiz is located in San Francisco, CA.
Support Hours: Phone and email support are available Monday-Friday 9 AM – 5 PM PST. A representative is not always available to take your call, but they return voicemails promptly.
Other Lending Products
SmartBiz does not have any other lending products.
Wondering how to get an SBA loan? Click here to get our FREE Guide:
How to Apply for an SBA Loan
The Bottom Line
The benefits of getting a loan through SmartBiz are quick access to money and borrower-friendly terms. You can complete your online application in 30 minutes and have access to funds in as little as 7 days .
SBA loans have much lower interest rates and longer repayment periods than alternative lenders. Their APR ranges from 7 % to 8 %, multiple times lower than OnDeck, CAN Capital, Kabbage, and merchant cash advances. You have 10 years to pay back an SBA loan from SmartBiz, but the good news is that you can repay it early with no pre-payment penalties.
The downside is that it can be hard to qualify for an SBA loan. If you have been in business for at least 2 years, are cash flow positive, and have at least a credit score above 600, we encourage you to learn more about SmartBiz’s SBA loans.