Newtek Business Services announced that it has entered into a $20 million credit agreement with Capital One, which consists of a $10 million term loan and a $10 million revolving credit facility. This is in addition to the current $27 million financing line from Capital One which Newtek uses exclusively for its small business lending business and brings the company’s total financing through Capital One to $47 million.

The term loan, which will be fully amortized over four years, will be used to refinance the company’s existing $10 million of mezzanine debt from a group of investors led by Summit Partners Credit Advisors. Due to the extinguishment of the mezzanine debt, the company will incur a one-time non-cash charge of approximately $1.9 million, which represents the total of remaining deferred financing costs attributable to the Summit debt and the remaining unamortized debt discount.

The refinance of the mezzanine debt will reduce the company’s cash interest expense by more than $1.0 million annually, for a total of approximately $4.2 million over the remaining term of the retired Summit loan. The additional $10 million revolving credit facility will be used by the company for general corporate purposes.

Barry Sloane, Newtek’s chairman, president and chief executive officer said, “We are extremely pleased to enter into this new agreement, expanding our existing relationship with Capital One as well as reducing our overall cost of capital. That said, we are also grateful for the capital that Summit provided to us in April 2012, which played an integral role in the Company’s growth.”