Underneath the Hood — What’s Happening with Newtek, The Nation’s #2 SBA 7(a) Lender
December 2, 2025
Bob Coleman
Founder & Publisher
Underneath the Hood — What’s Happening with Newtek, The Nation’s #2 SBA 7(a) Lender
Newtek’s story begins in the late 1990s, when Barry Sloane founded the company as a non-bank lender focused on serving America’s small businesses. Long before it held deposits or called itself a bank, Newtek built its reputation as a Small Business Lending Company under the U.S. Small Business Administration, originating government-guaranteed 7(a) loans for independent operators who couldn’t always find a home at traditional banks. It financed mom-and-pop restaurants, retail shops, and professional practices while expanding into payroll, merchant services, and insurance—becoming a one-stop business resource.
Throughout the 2000s and 2010s, the company’s lending arm, Newtek Small Business Finance, steadily grew into one of the top nonbank SBA lenders in the country. By 2022 it was funding more than $750 million in SBA loans annually, fueled by its digital application platform and broad referral network. The transformation to a bank came in January 2023, when Newtek acquired the National Bank of New York City and renamed it Newtek Bank, National Association. The move converted Newtek from a publicly traded business development company into a bank-holding company with a federally chartered deposit base.
In less than two years the bank’s deposits surged past one billion dollars, and its SBA 7(a) production reached record highs. Newtek ended fiscal 2024 as the number-one SBA 7(a) lender in the United States, with more than two billion dollars approved across over 3,000 loans.
Eleven months into FY 25 the bank ranks 2nd in 7(a) production with over 4,000 loan funding $1.8 billion.
The $2 billion bank stats as of 9/30/25:
- $1.2 billion in deposits
- Deposit growth increased 17% by business deposits and 12% by consumer deposits without bank branches
- ROA of 3.15%
- ROE of 31.94%
- 62% Increase in tangible book value per share over the past 10 quarters
About Newtek from Barry Sloane on the Earnings Call
“Our focus has always been on how we raise deposits, how we make loans, and how we do both with some of the lowest expense ratios in the marketplace,” Barry Sloane said in the company’s third-quarter discussion. “We believe we’re building a business model for the future—a technology-enabled bank focused on efficiency in a market that’s changing rapidly. Credit quality remains a top priority, and we’re confident the at the holding company and the bank, credit losseshave stabilized in the third quarter.”
Sloane noted that Newtek aims to “raise deposits below the risk-free rate” by leveraging its integrated
model. “We perform payroll for our customers, handle their merchant services, and connect all of it directly with a bank account. That combination is rare and unique in today’s market,” he said.
“We’re proud of our strong return on assets, tangible equity, and efficiency ratio, and as we approach our
third anniversary as a bank holding company, we’ve shown that we can manage the bank, manage risk, and execute our plan exactly as intended.”
He contrasted Newtek’s approach with that of traditional community banks: “We don’t compare well to $300-to-$500 million market capitalized community banks. We’re entirely different. We’ve opened 22,000 deposit accounts and serve 10,000 borrowers—all without traditional bankers, brokers, or branches. We do payroll for 20,000 employees and process over $5 billion in electronic payments annually…”