SmartBiz Review: Small Business Loans Reviewed and Explained

The concept for SmartBiz came from the 2008 financial crisis, where the major banks couldn’t adequately offer small businesses the funds they needed for growth and to help stimulate the economy.

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    Financially Reviewed by Gordon Scott

    SmartBiz understands how hard it can be sometimes to get financing. So to help out it has made its application process as straightforward and transparent as possible. It offers competitive rates, long repayment terms, and affordable monthly payments.

    Credit score and eligibility requirements are a little higher than some rival platforms, but you’ll find high approval rates to those that meet them, alongside excellent customer service.

    What Is SmartBiz?

    SmartBiz was founded in 2009 at the height of the financial crisis in order to provide affordable lending options to small businesses as a way to help kick start local economies. The platform doesn’t provide the loans itself but will connect you to some of the biggest banks across the country.

    Alongside bank loans, SmartBiz is an approved SBA loan distributor. These loans are arranged by banks and are guaranteed by the federal government. This makes them a little easier to apply for as the lender is taking much less of a risk. 

    Applying for a SmartBiz small business loan is a faster process than trying to apply at lots of different banks individually. Plus, the application process itself is quick and painless. 

    Advantages and Disadvantages of a SmartBiz Business Loan

    SmartBiz Advantages

    • Receive multiple loan offers - Compare and contrast the best possible loans to save your business time and find the terms most suited to you
    • Competitive loan rates - You’ll find impressively low starting rates here and those with excellent credit can find some great deals
    • Long repayment terms - This gives you the best possible option for spreading out payments
    • High borrowing limits - With standard bank loans topping out at $500,000 and SBA loans up to $5 million, it should be enough to meet just about any small business borrowing needs
    • Approval rates are high - While eligibility criteria might be a little stricter than other platforms, this means your chances of approval increase
    • Great reputation - SmartBiz has an excellent reputation as a trusted loan connection service, and it’s rare to hear complaints
    • Transparency - The platform doesn’t try to hide anything and is completely upfront about fees and terms

    SmartBiz Disadvantages

    • Long application process - As SmartBiz only connects you to banks, this can lead to some pretty lengthy applications
    • Additional fees - Though fees are generally low, you’ll find several, like origination and packaging fees. These can quickly add up, leading to more expensive repayments

    SmartBiz Loan Features

    Borrowers can only apply for two types of loans; SBA loans and bank term loans. Both have similar features, such as fixed interest rates and monthly repayments, but come with different eligibility criteria. 

    In certain circumstances, you may be able to apply for a line of credit, invoice financing, and business credit cards. However, you can’t apply online and will have to call customer service directly to discuss these options. In addition, no information on any of these loans is given upfront by SmartBiz, so they haven’t been included in our list below. 

    Bank Term Loan

    You’ll find some very competitive rates, respectable borrowing amounts, and generous repayment terms here. Plus, with so many partner banks to choose from, there’s a good chance you’ll find one with the perfect terms for you. This loan type has a minimum borrowing amounts of $30,000.

    Loan Type

    Bank Term Loan

    Term length

    2 - 5 years

    Repayment period

    Monthly

    APR range

    6.99% - 24.99%

    Min - Max amount

    $30,000 - $500,000

    SBA Loans

    SBA loans have much higher borrowing limits, longer terms, and lower interest rates than other lending options. While credit score requirements are usually lower, you may need to meet a number of other criteria to apply. Interest rates are currently set at the prime rate, plus 1.5% to 3.75%.

    Bear in mind you’ll need to choose which type of SBA loan you’d like. This could be for debt refinancing, working capital, or commercial real estate. The below is a general summary of all SBA loan terms offered. 

    Loan Type

    Bank Term Loan

    Term length

    10 - 25 years

    Repayment period

    Monthly

    APR range

    4.75% - 7%

    Min - Max amount

    $30,000 - $5 million

    SmartBiz Interest Rates and Fees

    There are a few extra fees and charges to pay, which are different across both types of loans. In all cases, there are no prepayment charges, and you may even receive discounts for paying early depending on your lender. 

    Bank Term Loan

    Loan type

    Bank Term Loan

    Origination fees

    Referral fee of 3%

    Prepayment fees

    Zero

    Late payment fees

    Not disclosed

    Maintenance fees

    Packaging fee of 3% plus closing fee of $200 - $300

    Interest rates

    6.99% - 24.99%

    SBA Loans

    Loan type

    SBA

    Origination fees

    Referral fee of 2%

    Plus loan guarantee fee fee between 1.7% - 2.25%

    Prepayment fees

    Zero

    Late payment fees

    Not disclosed

    Maintenance fees

    Packaging fee of 2% plus closing fee up to $450

    Interest rates

    4.75% - 7%

    How to Qualify for a SmartBiz Loan?

    To apply for a SmartBiz small business loan, you’ll need to meet some relatively tough eligibility requirements. This is because you’ll be applying via banks, which tend to have more stringent criteria. On all types of loans, your business must be for-profit and not have any tax liens, foreclosures, or bankruptcies on record within the last three years. 

    All loans require that  you have been in business for at least two years, so there are no options for recent startups, and you’ll need to provide substantial evidence that you’ll be able to meet the repayments. 

    In addition, many SBA loans require some kind of collateral to secure a loan which, in most cases, will be your accounts receivable, assets, or inventory.  

    Bank Term Loan

    Criteria

    Bank Term Loan

    Minimum credit score

    660+

    Minimum annual revenue

    No specific requirement - assessed on an individual basis

    Minimum time in business

    Two years

    SBA Loan

    Criteria

    SBA Loan

    Minimum credit score

    640+

    Minimum annual revenue

    No specific requirement - assessed on an individual basis

    Minimum time in business

    Two years

    The SmartBiz Application Process?

    The application process itself is pretty straightforward, and you’ll have a good idea of whether you’ll qualify or not in just a few minutes by answering some questions via the website. The online application form is intuitive and proceeds smoothly. However, a common customer complaint is that the approval and disbursement process can be quite lengthy, especially when applying for an SBA loan.

    This is because banks and traditional lenders tend to undertake much more detailed due diligence on customers and require far more detailed documentation. Plus, in some SBA loan applications, you might not find out if you’re eligible until you’ve submitted reams of documentation, which can be a little frustrating, but is understandable when you’re dealing with an extra layer of government bureaucracy. 

    Luckily, SmartBiz takes quite a lot of stress out of the process by automatically assessing which documents you’ll need in every application, and the requests will be tailored to your business. Generally, the larger your loan, the more documents you’ll need, but you should expect to provide:

    • A form of photographic ID
    • Two years of personal tax returns
    • Two years of business tax returns
    • Business bank account statement for the previous six months
    • Your profit and loss statement

    Final approval can usually take a few weeks and you may have to answer some additional questions from the bank. Once approved, though, you’ll usually receive your funding fairly quickly. 

    How Does SmartBiz Determine the Loan Amount?

    The full formula isn’t disclosed as each bank will have different criteria to determine your loan amount. Your credit score will be the biggest contributing factor, closely followed by your cash flow information. 

    Since its founding in 2009, SmartBiz has helped facilitate more than $4 billion in loans and claims to have helped create more than 300,000 jobs right across the US. Plus, more than 50% of loans now disbursed are to women-owned, minority, and veteran businesses. SmartBiz is committed to helping local communities get back on their feet following the pandemic. 

    SmartBiz Customer Support

    Before contacting customer service you might want to check out the very comprehensive FAQ section over on the SmartBiz website. It covers just about every topic you can think of and can direct you to the relevant parts of the site to work through your application. 

    If you have any specific queries you can reach out over the phone or via email. The platform is well-known for its excellent customer service and friendly agents. SmartBiz is quite active across a variety of social media platforms too, and you're encouraged to reach out if you’ve got any queries.

    Since you’re borrowing from the banks, and not directly from the platform itself, if you have any specific queries about your loan once approved, you’ll need to get in touch with your lender’s customer service team and not SmartBiz. 

    SmartBiz Loan Reviews

    SmartBiz receives a lot of praise for its customer service, low rates, and generous lending terms. It has a top score of five out of five over on MerchantMaverick and an average rating of 4.6 out of 5 on Trustpilot from more than 13,300 reviews. 

    Customers love the intuitive website, the simple application process, and how informative the staff is. Users report that the customer service team is able to field most types of loan questions and are incredibly helpful when dealing with some of the more complex aspects of SBA loans. 

    Others enjoy the convenience of being able to see multiple offers at the same time, rather than trying to contact lots of different banks and lenders to find funding options. 

    The biggest complaint people have is the length of time it takes to get approved and receive funding. In many cases, customers are waiting three weeks or more to hear back on approvals, and are waiting even longer to actually receive the funding. However, this isn’t the fault of SmartBiz. Banks and traditional lenders are well-known for taking longer to arrange funding than online platforms, and many of the delays stem from customers not having the right documents at hand.  

    Positive Reviews

    Negative Reviews

    Excellent customer service

    Lengthy loan approval times

    Easy-to-understand application process

    Lengthy funding times

    Low interest rates

    Some identity authentication issues

    Final Thoughts

    For those with good credit and a strong history of previous business performance, SmartBiz small business loans are a perfect way to fund the latest addition to your venture. There are very few restrictions to your loan purpose and you can use it for business expansion, buying new equipment, covering taxes, and paying staff costs, to name a few. Plus, rates are low, terms are lengthy, and the fixed rates on offer make it easy to plan your financial future. 

    Approvals do take considerably longer than other online platforms given that all applications must go via a banking institution, so we wouldn’t recommend it if you need to cover emergency situations. What’s more, it won’t be the choice for you if you have bad credit, either.