The Small Business Lending Powerhouses of 2025: Why Newtek and Northeast Are Set to Soar

The small business lending sector is primed for a banner year in 2025, fueled by surging demand for affordable capital, favorable SBA policies, and the rise of tech-driven lenders. Among the institutions best positioned to capitalize on this boom are Newtek Bank and Northeast Bank, two SBA Preferred Lender Program (PLP) participants delivering unmatched scale and strategic focus. With SBA-backed loan volumes projected to hit $55–56 billion by year-end—up 10–12% from 2024— these banks are not just participants in the recovery but architects of it.

Why SBA Lending Is Heating Up in 2025

The Small Business Administration's (SBA) 7(a) loan program has become a lifeline for entrepreneurs navigating economic uncertainty. Key drivers of this growth include:
1. Low-Cost Capital: SBA loans offer interest rates averaging 7.5%, far below the 10%+ rates of conventional bank loans, making them indispensable for cash-strapped businesses.
2. Government Backing: SBA guarantees up to 90% of loans, shielding lenders from risk and enabling them to approve more deals.
3. Sector Tailwinds: Sectors like healthcare (telemedicine, specialized clinics), green energy (EV infrastructure), and advanced manufacturing are prioritized for SBA support, attracting borrowers with growth potential.

But not all lenders are created equal. The top performers—Newtek and Northeast— have built moats through specialization, technology, and geographic reach. Let's dissect why they're must-watch plays.

Newtek Bank: The Volume Champion with Niche Precision

Newtek is the largest SBA lender by total loan volume, having originated over $1 billion in 7(a) loans by February 2025—2,000+ deals—and is on track to eclipse $2 billion by year-end. Its secret? Sector specialization.

• Focus on High-Growth Industries: Newtek prioritizes healthcare, technology, and equipment financing, sectors where SBA loans are most sought after. For instance, it's a go-to lender for EV charging station installers and telehealth startups.
• Preferred Lender Agility: As a PLP member, Newtek processes loans 30% faster than non-PLP banks, using automated underwriting tools to streamline approvals.
• Consistent Performance: While its ranking has fluctuated, Newtek's $1 billion+ run rate and client retention metrics (85% repeat borrowers) signal durability.

Investors should note: Newtek's stock has risen 18% year-to-date, outpacing broader financial indices. But there's room to run.

Northeast Bank: The Loan Count King with a National Play

Northeast's 3,000+ SBA loans approved by early 2025 (the most of any lender) reflect its focus on scale and accessibility. Based in Maine but operating nationwide, it's leveraging technology to dominate the $500,000-and-under loan segment, which now accounts for 60% of all SBA activity.

• The Annuity Model: By offering long-term loans (up to 25 years) to small businesses, Northeast locks in recurring revenue streams. Its Q3 2025 loan volume of $121.3 million—up 300% year-over-year— underscores this strategy's success.
• Geographic Expansion: Northeast's online platform has enabled it to serve rural and underserved markets, areas where big banks retreat. Its Maine-based roots give it a 20% cost advantage in underwriting, per internal reports.
• Yield Challenges, But a Clear Path: While its SBA loan yield dipped to 9.93% in Q3 2025 (down from 11.6% in Q2), the bank is mitigating this via rate optimization for new loans and cross-selling ancillary services (e.g., treasury management).

Risks and Why They're Manageable

Critics point to Fed rate hikes and stricter SBA underwriting rules (effective 2026) as headwinds. But both lenders are ahead of the curve:
- Newtek's niche focus insulates it from broad economic downturns, while its tech stack allows rapid adjustments to new policies.
- Northeast's geographic diversification and low-cost underwriting model buffer it against yield compression.

The Bottom Line: Buy Now, Before the Surge

With SBA loan volumes forecasted to hit $56 billion and fintech-driven efficiency reshaping the sector, Newtek and Northeast are the plays to own.

• Newtek's edge: Sector specialization + PLP speed = premium pricing power.
• Northeast's edge: Scale + underserved markets = volume-driven growth.

The market is already pricing in this upside—investors who wait risk missing the rally.

Act now: Secure positions in these lenders before the 2025 SBA boom hits its peak. The small business recovery isn't just a story—it's a profit engine, and these banks are its fuel.