NEW YORK, Sept. 13, 2010 (GLOBE NEWSWIRE) -- Newtek Business Services, Inc. (Nasdaq:NEWT), The Small Business Authority, has announced that it has entered into an agreement with Capital One, N.A. reflecting a summary of proposed terms of a warehouse line of credit to be used to fund additional Small Business Administration ("SBA") 7(a) loans. If finally agreed to by the Bank and the Company, the credit facility would be used to fund those portions of SBA loans made that are guaranteed by the SBA, with funds received on the sale by the Company of those portions reducing the credit facility. This is a different additional facility to the current term facility that exists with Newtek. This facility also requires SBA approval which we received on the prior facility.
Newtek's subsidiary, Newtek Small Business Finance, Inc., is active in making SBA 7(a) loans, one of the very few non-bank lenders currently making small business loans. This proposed credit facility, often referred to as a "wet-funding" credit line, will enable the Company to take better advantage of the pent-up demand for credit by credit worthy small businesses nationwide. If the credit facility is put in place, the Company's projected small business lending will be more easily facilitated in 2010 and beyond.
Barry Sloane, Chairman, President and Chief Executive Officer of Newtek, remarked that, "This wet funded warehouse facility dramatically improves the Company's ability to fund more loans to more borrowers and, with the securitization of the non-guaranteed loan portions which we have separately announced today, allows us to grow and scale this business to maximize its profit potential. In 2011, the combination of the securitization and the new Capital One Bank financing could enable us to originate in excess of $100 million of loans and dramatically improve our lending segment profitability over 2009 and 2010 levels. We believe this facility will enable us to take greater advantage of our fully financed lending platform for government guaranteed SBA Loans. This financing will allow us to continue to be one of the nation's largest non-bank small business government guaranteed lenders and help us to continue to position ourselves as The Small Business Authority."
About Newtek Business Services, Inc.
Newtek Business Services, Inc., The Small Business Authority, is a direct distributor of a wide range of business services and financial products to the small- and medium-sized business market under the NewtekTM brand. Since 1999, Newtek has helped small- and medium-sized business owners realize their potential by providing them with the essential tools needed to manage and grow their businesses and to compete effectively in today's marketplace. Newtek provides one or more of its services to over 100,000 business accounts and has positioned the NewtekTM brand as a one-stop-shop provider of such business services. According to the U.S. Small Business Administration, there are over 29.6 million small businesses in the United States, which in total represent 99.7% of all employer firms.
Newtek's business service lines include:
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Electronic Payment Processing: eCommerce, electronic solutions to accept non-cash payments, including credit and debit cards, check conversion, remote deposit capture, ACH processing, and electronic gift and loyalty card programs.
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Web Hosting: Full-service web host which offers eCommerce solutions, shared and dedicated web hosting and related services including domain registration and online shopping cart tools.
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eCommerce: a suite of services that enable small businesses to get up and running on-line quickly and cost effectively, with integrated web design, payment processing and shopping cart services.
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Business Lending: Broad array of lending products including SBA 7(a) and SBA 504 loans.
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Insurance Services: Commercial and personal lines of insurance, including health and employee benefits in all 50 states, working with over 40 insurance carriers.
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Web Services: Customized web design and development services.
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Data Backup, Storage and Retrieval: Fast, secure, off-site data backup, storage and retrieval designed to meet the specific regulatory and compliance needs of any business.
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Accounts Receivable Financing: Receivable purchasing and financing services.
- Payroll: Complete payroll management and processing services.
For more information, please visit www.newtekbusinessservices.com.
Note Regarding Forward Looking Statements
Statements in this press release including statements regarding Newtek's beliefs, expectations, intentions or strategies for the future, may be "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements. Such risks and uncertainties include, among others, intensified competition, operating problems and their impact on revenues and profit margins, anticipated future business strategies and financial performance, anticipated future number of customers, business prospects, legislative developments and similar matters. Risk factors, cautionary statements and other conditions which could cause Newtek's actual results to differ from management's current expectations are contained in Newtek's filings with the Securities and Exchange Commission and available through http://www.sec.gov.