SmartBiz is an online marketplace that offers SBA 7(a) loans through an automated online application process, making it one of our top picks for best small business loans. SBA loans are guaranteed up to 85% by the U.S. Small Business Administration, which allows lenders to offer more competitive rates for small businesses. If you are looking for a long-term solution for your small business financing needs and you can meet the stricter SBA loan requirements, SmartBiz is a good choice.
- Review: Who Should Consider Applying?
- SBA Loan Features
- Application Process
- How Does SmartBiz Compare to Other Online Lenders?
SmartBiz Review: Who Should Consider Applying?
SmartBiz offers SBA 7(a) loans up to $5 million for 10 to 25 year terms with low APRs that vary between 5.6% and 8.69% (loans have a variable interest rate of Prime plus 2.75% to 3.75%). SmartBiz streamlines the application process to let applicants get approval for SBA loans more quickly.
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To qualify for an SBA loan through SmartBiz, your business needs to be at least 2 years old and have a minimum annual revenue of $120,000. To borrow over $150,000, your business will need to have an annual revenue of at least $300,000 and you must have a personal credit score of 675. Loans under $150,000 only require credit scores of 650. In addition, your business must have a FICO SBSS LiquidCredit score of 150 or more. The average SmartBiz borrower owns a 5-10 year old business with an annual revenue of $1.2 million and 10 employees. Owners have average credit scores of 700.
To qualify for an SBA loan, the Small Business Administration requires that you cannot have any bankruptcies or foreclosures in the past three months. You also cannot have any outstanding tax liens or past defaults on government loans.
Most of the businesses that use SmartBiz have positive cash flow and can demonstrate that they can make monthly repayments. All partners who own 20% or more of the business must personally guarantee the loan. Couples who own a business together and meet this ownership minimum when combining the amount they own together must each personally guarantee the loan as well.
SmartBiz SBA loans also require a lien on business assets, but the total value of the assets doesn't have to add up to the amount you are approved to borrow. When you get a SmartBiz SBA loan, you will also need your landlord agree to sign a subordination release. You’ll have to update the terms of your lease to match the loan term and ensure that you have the choice to renew your lease on a yearly basis.
When you need more funds, you can apply for another SmartBiz SBA loan while you are still paying off your first one. If you are approved for another loan 90 days after receiving your first approval, the loans will be regarded as one loan when calculating any applicable SBA guarantee fees.
For a government-backed loan, SmartBiz SBA loans have particularly quick funding times as you can get funds in as few as seven days after the application is complete. The downside is that it can take between four to six weeks to fund a loan over $150,000. In addition, SBA loans cannot be provided to businesses in certain industries, including lending, life insurance, political activities, real estate, gambling and mining.
Because SBA loans are partly guaranteed by the U.S. Small Business Administration, there are stricter eligibility requirements and slightly slower funding times. The good news is that you’ll benefit from lower monthly payments and APRs.
How Do I Qualify for a SmartBiz SBA Loan?
Loan Amount Range
|$500,000 - $5 million|
|5.85% - 8.95%|
Within five minutes, you can see if you pre-qualify online for a SmartBiz SBA loan with no effect on your credit score. You’ll need to describe how you plan to use the funds and provide business information. To complete the application, you will need to upload necessary documents such as a current income statement and a current balance sheet. You will also need to provide your bank account balances for the past three months and tax returns for the last three years that can show profits and losses. SmartBiz’s lending banks also want to see a list of business debt, if your business has any.
Once you pre-qualify, you will be assigned a personal loan consultant who can answer any questions you may have during the application process. Once you complete the application and are approved, you can get funds in as quickly as one week. After your application is handed off to one of SmartBiz’s lending banks for approval, SmartBiz will conduct a hard credit pull that can affect your credit score.
SmartBiz SBA loans have many benefits, but you might not meet the stricter SBA requirements to qualify for them. Let’s take a look at some alternative lenders that do not offer SBA loans.
If you cannot meet the SBA loan requirements, Funding Circle is a good option. Funding Circle is a peer to peer lender that offers small business loan between $25,000-500,000 for terms up to five years. Similar to SmartBiz SBA loans, your business needs to be at least 2 years old to qualify. Funding Circle requires a minimum annual revenue of $150,000 and an owner credit score of 620. APRs range from 8% to 33%.
If you can't meet SmartBiz's SBA loan requirements or want a line of credit, Lending Club is a good choice. Lending Club offers lines of credit and loans up to $300,000 for terms between three months and five years. Lending Club requires businesses to at least 2 years old and have an annual revenue of $75,000. Borrowers must own at least 20% of the business and Lending Club prefers borrowers with credit scores of at least 620. APRs start at 7.77%.
OnDeck offers loans up to $500,000 and lines of credit up to $100,000. The requirements for an OnDeck loan are less strict than a SmartBiz loan as OnDeck only requires one year in business, annual revenue of $100,000 and a credit score of 500. Requirements for a line of credit are the same. If you want to get funds even more quickly or if you want to have a line of credit, then OnDeck is another good option.