Barry Sloane, President, Chairman & CEO, NewtekOne

In an interview with Invest:, Barry Sloane, president, chairman, and CEO of NewtekOne, discussed the bank’s branchless, technology-driven model and its focus on serving independent business owners nationwide. “We are totally different from 98% of the banks and financial institutions that are in the marketplace,” Sloane said.

What inspired the idea of building a fully integrated ecosystem for independent business owners?

The inspiration came from my background. My dad was a retailer in Brooklyn, New York, and I grew up working in his store from the age of 11. I watched him deal directly with customers and employees at a time when business was face-to-face rather than through a screen or the internet.

As I grew up, got educated, earned an MBA, and spent 15 years on Wall Street, I realized that independent business owners are the economic engine of growth in the United States. According to the Small Business Administration, about 36 million businesses fall into that definition, representing about 43% of GDP.

When I left Wall Street in 1995, I started Newtek with the goal of building a company that would provide financial and business solutions to independent business owners across all 50 states. That has been close to a 29-year journey and a labor of love. We recently acquired a bank, which has heightened the opportunity.

What are the biggest unmet needs you see in the small-business market today?

It is in almost every category. When small and medium-sized businesses open a bank account, they typically have to go physically into a branch. They are often offered a business checking account that pays little interest, and if they want to move money, they are charged fees for ACH transfers, wires, and minimum balances.

Another area is the ability to borrow. Most financial institutions do not have a comprehensive solution for business borrowing. We give business owners the ability to borrow money at a fair interest rate and pay it back over 10 or 25 years. A longer amortization schedule reduces the payment and gives them long-term patient capital.

The same is true across payroll, merchant services, and insurance. The marketplace today does not focus on this demographic or provide an ecosystem that helps businesses grow, reduce expenses, and reduce risk.

How has becoming a bank changed your growth strategy and competitive positioning?

The decision to acquire a bank came after 24 years in business. We were warned that banking is a heavily regulated environment and that regulators are difficult to deal with. We found the opposite. We found regulators to be extremely smart, reasonable, and helpful in making our business better by giving us ways to manage risk and run the business.

The primary purpose of being in a banking environment is that we can take all the existing solutions we had as a non-bank and put them into a portal for the customer. Customers go to their bank several times a week, which gives us opportunities to interface with them and help them in many ways.

That may include moving money cost-effectively, getting higher rates of interest, obtaining a loan, properly insuring their business, or integrating financial operations into an accounting general ledger. At NewtekOne, we are providing a full ecosystem to help customers thrive.

Why should financial institutions play a broader role in helping businesses operate?

People forget why we have a banking system in this country. The banking system and capital markets in the United States are a major reason this country is an economic powerhouse. The ability to provide financing to businesses helped make the country great.

A bank is an ideal platform for providing these solutions. The reason government and state regulators are involved in banking is because a healthy banking system supports communities, employment, and economic development. That is why the government provides FDIC insurance. Having a bank charter is an honor, and I treat it as such.

We are able to attract deposits and provide funding to businesses at low rates using government-guaranteed FDIC insurance. In turn, we have to provide solutions back into the economy to make businesses stronger. Small and medium-sized businesses represent a major share of businesses in the United States and drive a significant portion of net new job growth.

How is Newtek using AI and digital infrastructure to improve the experience for small-business owners?

Artificial intelligence is still in its early stages, and it is growing. As a country, we do not need to be afraid of it. The benefit of AI is that it makes us more efficient. It can handle mundane tasks and allow workers to be more productive in other areas.

There is no better place to use AI than in a bank, where there are large amounts of information and data on borrowers. It enables financial institutions to follow policies and procedures with higher efficiency.

For example, AI can read an operating agreement or lease agreement instead of relying only on a lawyer. In effect, you are using the intelligence of many lawyers to quickly read a document and compare it with standards or best practices. It is faster and can reduce human error.

This will be a game changer because many financial institutions still have mundane tasks performed inefficiently. AI can make the banking system stronger, less prone to error, and better for businesses looking to borrow money.

Is the future of SMB banking becoming less geographic and more platform-driven?

Yes. We are branchless and traditional bankerless. We are an OCC-chartered national bank, so we can reach across the United States. While the largest banks appear to be continuing with branches, I do not think most people regularly go into a branch to do their business anymore.

Branches today are often about advertising, branding, and having a visible community presence. We are far beyond the days of passbooks and tellers as the main form of record keeping.

We provide financial and business solutions on demand, 24/7, 365 days a year. Customers can go to our website and get a live human being on camera with a NewtekOne backdrop. We use technology and software, but customers can still get a live person. That matters because customers still want human interaction.

Independent business owners do not necessarily want to do banking in the middle of the day. They may want to do it in the evening, on weekends, or whenever they choose. The future of financial and business solutions for business owners will be on demand.

COVID taught us that people do not necessarily need to be in an office to do their tasks. That has worked well for us. We have grown a $180 million bank to $2 billion in total assets in about three years, with 37,000 banking accounts opened digitally, 10,000 borrowers, and 80,000 customers.

How does Newtek maintain a personalized relationship model while operating at a national scale?

Every customer is assigned a customer service representative within the appropriate vertical. If they are a depositor, borrower, payroll customer, or merchant services customer, they have a specialized person they can go to. It is not a call center.

That is different from the traditional banker model. Customers click and get someone online to communicate with them. Customers are giving you their money, and that is an important area of trust. They want to know they are cared for and that they have a dedicated customer service representative they can interact with regularly.

What final point would you like readers to understand about NewtekOne’s model?

We are not giving out toasters or blenders. We are not typically taking clients out for breakfast, lunch, or dinner. We are providing them with the best product, the best price, and the best solution. We treat a company with two employees with the same respect and dignity as a larger customer.

We are the antithesis of the traditional banking business. Banks earn money primarily by making low-risk, low-margin loans and by taking deposits below the risk-free rate. That is going to change because the internet, real-time payments, stablecoin, and other mediums are making the deposit environment highly competitive.

Unless banks adjust their model and offer loan products that are more aggressive while still charging the appropriate rate, it will be difficult for them to survive. Our loan losses are higher than the average bank, but we charge a fair price, so net of those losses, our margins are much greater.

We have an entirely different model. It is efficient because we do not have branches or traditional bankers. Our staff can work remotely and serve customers cost-effectively. We deliver service on demand, produce a better product, pay a fair price for people’s money, charge a fair rate, and provide capital to organizations that typically cannot get it today.

We are totally different from 98% of the banks and financial institutions that are in the marketplace, both in South Florida and across the United States.