Seeking to Be a Business Solution Provider, ISO Newtek Closes on National Bank of New York City,

Newtek Business Services Corp., a provider of loans, merchant processing, and other services for small businesses, has completed its acquisition of National Bank of New York City. The acquisition agreement, which Newtek entered into in 2021, was subject to approval by the Office of the Comptroller of the Currency.

The deal also builds on approval last year from the Federal Reserve for Newtek to become a bank-holding company and financial-holding company through its acquisition of the bank, which will be renamed Newtek Bank N.A.

In addition to the acquisition, Newtek has notified the Securities and Exchange Commission that it has ceased being a business-development company as of Jan. 6, and has become a business-solution company that offers banking as a service and banking on demand, depository functions, and money-movement and transactional capabilities, including payment processing and payroll. As a result, Newtek will reportedly no longer be subject to the Investment Company Act of 1940. Business-development companies typically invest in small and medium-size companies to help them grow.

Newtek is also rebranding itself as NewtekOne to better reflect its new business model. Newtek is an independent sales organization and merchant-service provider for several financial institutions, including Elavon Inc., which is a wholly owned subsidiary of U.S. Bancorp, Other clients include Wells Fargo Bank N.A., Synovus Bank, Fifth Third Bank N.A., and Westamerica Bank.

Newtek chief executive, president, and chairman Barry Sloane said the acquisition of National Bank of New York City and the move to remake Newtek into a business-solutions provider will benefit Newtek’s growth in a significant way, in contrast to the limiting structure of operating as a business-development company.

“Under our new financial holding company structure, we plan to capitalize on our longstanding business model, better serve our independent-business-owner clientele, and enhance shareholder value in the marketplace as the one solution for all [our clients’] business needs,” Sloane says in a prepared statement. “We believe converting to a financial holding company and owning a nationally chartered bank better fits the market landscape, both financially and operationally, for our clients and can provide increased opportunities for the company to grow.”