Newtek Small Business Finance Has Funded and Approved Approximately $700 Million of Paycheck Protection Program (PPP) Loans To Date

Rhea-AI Summary

Newtek Business Services Corp (Nasdaq: NEWT) has announced the funding of approximately $700 million in Paycheck Protection Program (PPP) loans, part of a potential total of $1.15 billion. The company’s subsidiary, Newtek Small Business Finance, estimates that up to 130,000 jobs could be retained through these loans. As of May 10, 2020, $120 billion in funding is still available under the SBA 7(a) program. Additionally, Capital One has renewed NSBF's $150 million revolving credit facility, providing further support for ongoing operations.

Positive

• Funding of $700 million in PPP loans, supporting job retention for 130,000 employees.
• Potential total of $1.15 billion in PPP loans shows strong demand.
• Renewal of $150 million revolving credit facility enhances liquidity.

Negative

• Uncertainty with the funding of the remaining $450 million of PPP loans.
• Risk factors include potential competition and operational challenges.

BOCA RATON, Fla., May 12, 2020 (GLOBE NEWSWIRE) -- Newtek Business Services Corp., (Nasdaq: NEWT), an internally managed business development company (“BDC”), today announced that Newtek Small Business Finance, LLC (“NSBF”), the Company’s nationally licensed lender under the U.S. Small Business Administration (“SBA”) Section 7(a) Program, has funded and approved for funding approximately $700 million of Paycheck Protection Program (“PPP”) loans of its total $1.15 billion of PPP loans with SBA loan (E-Tran) numbers to date.  NSBF estimates that upwards of 130,000 employees could be retained by NSBF’s PPP borrowers if NSBF’s total potential funding of $1.15 billion of PPP loans is reached. While NSBF estimates it has $1.15 billion of PPP loans with SBA loan (E-Tran) numbers, there is no assurance that it will ultimately fund all of these loans.  The PPP program is still ongoing and NSBF is still accepting PPP loan applications as of the date of this release. As of Sunday, May 10, 2020, there was approximately $120 billion of SBA 7(a) appropriation remaining for PPP loans and SBA 7(a) loans. As a result, the Company believes the gross amount of PPP loan approvals can increase or decrease from the current level. 

Stifel Financial, UBS, and Amalgamated Bank as well as other existing partners of Newtek, are providing NSBF with PPP loan referrals and additional term financing to originate PPP loans. 

Barry Sloane, Chairman, President and Chief Executive Officer said, “We are pleased to announce the continued increase in funding and closing, to date, of approximately $700 million of PPP loans out of our $1.15 billion of PPP loans with SBA loan (E-Tran) numbers.  Between the first and second rounds of government allocations of PPP funding, NSBF has closed or funded 64% of NSBF’s  total pipeline of current PPP opportunities.  As of Sunday, May 10, 2020, there was approximately $120 billion remaining for funding PPP loans and SBA 7(a) loans.  The SBA reported that the average loan size in the second round of government allocation of PPP funding has been approximately $73,000 per borrower as of May 10, 2020.  NSBF continues to accept new PPP loan applications.  We currently forecast that we will fund approximately $1.15 billion PPP loans.”

Capital One Bank, N.A., NSBF’s warehouse credit provider, recently renewed the Company's three-year $150 million revolving credit facility with a 5-year term.  “This facility should provide capital to resume NSBF’s regular course of business in a post-Covid-19 world," Mr. Sloane concluded.  

About Newtek Business Services Corp.

Newtek Business Services Corp., Your Business Solutions Company^®, is an internally managed BDC, which along with its controlled portfolio companies, provides a wide range of business and financial solutions under the Newtek^® brand to the small- and medium-sized business (“SMB”) market. Since 1999, Newtek has provided state-of-the-art, cost-efficient products and services and efficient business strategies to SMB relationships across all 50 states to help them grow their sales, control their expenses and reduce their risk.

Newtek’s and its portfolio companies’ products and services include: Business Lending, SBA Lending Solutions, Electronic Payment Processing,  Technology Solutions (Cloud Computing, Data Backup, Storage and Retrieval, IT Consulting), eCommerce, Accounts Receivable Financing & Inventory Financing,  Insurance Solutions, Web Services, and Payroll and Benefits Solutions.

Newtek^® and Your Business Solutions Company^®, are registered trademarks of Newtek Business Services Corp.

Note Regarding Forward Looking Statements

This press release contains certain forward-looking statements. Words such as “believes,” “intends,” “expects,” “projects,” “anticipates,” “forecasts,” “goal” and “future” or similar expressions are intended to identify forward-looking statements. 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/.  Newtek cautions you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected or implied in these statements.   

SOURCE: Newtek Business Services Corp.

Investor Relations & Public Relations
Contact: Jayne Cavuoto
Telephone: (212) 273-8179 / jcavuoto@newtekone.com

FAQ

What is the total amount of PPP loans announced by Newtek?

Newtek has announced approximately $1.15 billion in Paycheck Protection Program loans.

How much has Newtek funded in PPP loans as of May 2020?

As of May 2020, Newtek has funded approximately $700 million in PPP loans.

How many jobs could be retained through Newtek's PPP loans?

Newtek estimates that up to 130,000 jobs could be retained through the PPP loans.

What financial support has Newtek received from Capital One?

Capital One has renewed Newtek's $150 million revolving credit facility.

What is the remaining funding available for PPP loans as of May 2020?

Approximately $120 billion in funding remains available for PPP loans.