NewtekOne, Inc. (NEWTH)
NEWTH is the ticker for NewtekOne, Inc.’s 8.625% Fixed Rate Senior Notes Due 2029, unsecured debt securities issued by the financial holding company to fund its lending and operational growth. The notes represent a claim on NewtekOne’s consolidated cash flows, subordinate to the deposits that fund Newtek Bank but senior to the company’s common equity. Understanding their risk and return requires understanding how NewtekOne has evolved and how its capital structure has changed to accommodate different growth phases.
From business services to financial holding company: the arc of capital needs
NewtekOne’s debt structure reflects the company’s evolution. Founded in 1998 by Barry Sloane, the company began as Newtek Business Services Corp., a provider of outsourced back-office services, website hosting, and payroll processing to small businesses. In those early years, capital needs were modest: the company invested in technology infrastructure and sales teams but did not need to fund lending balances. Funding came from operating cash flow and periodic equity raises from venture investors and public markets.
The turning point came in the mid-2000s when management recognised that small-business customers were hungry for credit but that banks were reluctant to serve them. The company began originating SBA loans, first as a non-bank lender, then after establishing Newtek Bank in 2006, as a bank subsidiary. Suddenly the company faced a different capital calculus: each dollar of loans originated required funding, which meant either deposit funding or external debt. The company’s leverage rose as it grew the loan book.
By the early 2010s, NewtekOne had become a diversified financial-services platform: a bank making loans, a payments processor, a provider of accounts-receivable and inventory financing, and a retained services business. The company still generated investment-grade cash flows, but the growth in lending required more debt to fund. The company issued multiple tranches of senior notes and preferred securities to investors.
The capital raising cycles of the 2020s
The COVID-19 pandemic in 2020 created two opposing forces. On one side, the Paycheck Protection Program (a government-backed lending scheme for small businesses) generated huge origination volumes and fees for the company, boosting capital generation. On the other side, credit losses on existing portfolios rose as borrowers entered distress. The company used the strong PPP period to raise additional capital from investors.
By 2022, the company had built a meaningful debt balance and needed to extend maturities and manage refinancing risk. In 2024, NewtekOne issued the 8.625% senior notes as part of a broader capital raise to fund growth and to refinance earlier debt that was approaching maturity. The coupon of 8.625% reflected credit conditions in 2024: it was higher than the rates the company could achieve in 2015–2018 but lower than the rates demanded during the pandemic uncertainty of 2020–2021. The higher coupon also reflected the simple fact that NewtekOne, as a smaller bank with a concentrated loan portfolio, carried more credit risk than the largest money-centre banks and had to pay investors accordingly.
How NewtekOne funds itself and returns capital
NewtekOne’s capital structure in the mid-2020s consists of multiple layers. At the bottom are customer deposits held in Newtek Bank, which fund a large portion of the loan portfolio at the lowest cost. Above deposits sits secured financing (asset-based lending and warehouse lines that are collateralised by specific loans). Above those sit unsecured senior notes like NEWTH. Above those sit preferred securities that carry fixed dividends. Above all sits common equity, which bears the first-loss risk if the company underperforms.
This layering matters. The senior noteholder (investor in NEWTH) gets paid before the preferred stockholder and before the common shareholder, but only if the company generates cash to pay them. If loan losses rise or deposit outflows accelerate, NEWTH holders face the risk that the company cannot maintain the 8.625% coupon — a risk borne by the cost of funds (the coupon) and reflected in the price of the security on secondary markets.
NewtekOne funds its lending primarily from deposits and wholesale debt. Deposits are the stable, renewable base. When deposit growth slows (as it did during periods when money-market mutual funds offered comparable yields), the company must rely more heavily on wholesale funding — issuing new senior notes like NEWTH. The company pays the coupon from net interest income (the spread between what it earns on loans and what it pays on deposits and debt) and from fees on loan originations and payments processing.
The company returns capital to common shareholders through dividends, which are paid from earnings after loan loss provisions. When earnings are strong, the dividend rises. When earnings are weak, the dividend is held flat or reduced. Preferred shareholders receive fixed dividends that have priority over common dividends. Senior noteholders receive the fixed coupon regardless of earnings, but only if the company remains solvent — in bankruptcy, noteholder recovery would depend on asset sales and the seniority structure.
The maturity wall and refinancing risk
By 2026, NewtekOne had accumulated meaningful debt maturities looming in the 2027–2030 period. NEWTH notes mature in 2029, presenting a scheduled refinancing in the middle of the next economic cycle. If credit conditions are tight or loan losses are rising in 2029, the company may struggle to refinance the maturity without paying a sharply higher coupon, or it may be forced to slow loan growth to conserve capital.
Management has been proactive in addressing maturity concentration. In early 2026, the company refinanced nearly $95 million of debt that was approaching maturity, pushing some of the burden into later years. The company also raised capital through equity offerings at points when the stock was trading at a premium to book value, reducing the need for debt-funded growth.
Reading the NEWTH investment
NEWTH holders should monitor Newtek Bank’s loan portfolio quality: delinquencies, charge-offs, and the company’s loan loss provisions. These figures appear in the quarterly 10-Q filing and annual 10-K (SEC CIK 0001587987). The company’s deposit-to-loan ratio indicates whether the funding base is growing or shrinking relative to loan growth; declining ratios signal reliance on wholesale funding, which is costlier and less stable. The ratio of new loan originations to loan losses indicates whether management is underwriting well or taking on excessive credit risk to drive growth. Finally, the debt maturity schedule in the 10-K shows when NEWTH and other senior notes come due and whether the company will face a refinancing squeeze during an economic downturn.