Total consolidated revenues were $23.4 million which was higher than previously given guidance of $22.7 - $23.2 million. The Company outperformed or met previous guidance of revenues, pretax net income and EBITDA across its Electronic Payment Processing, Web Hosting, and Small Business Lending operating segments. Our losses from the CAPCO segment were $3.3 million, a majority of which is the result of non-cash expenses. As previously reported, these losses from the CAPCO segment will continue to decline over time. As of today, we are improving our consolidated annual guidance.

CEO and Chairman Barry Sloane said, "We are very pleased that the company was able to outperform previously established company guidance in its three key operating segments. Despite a clearly apparent softening in the economy and overall business climate, its great to see our three key business service segments (Electronic Payment Processing, Web Hosting, and SBA Lending) outperform our guidance and grow at a double digit rate as compared to 2006.

The company continues to maintain a strong cash and U.S. Treasury position of $40 million at the end of Q2, while the company paid off $4.7 million of debt during the first 6 months of 2007.

We are also very happy with the current position and credit posture of our small business lending operation. While many lenders today (bank, non-bank, hedge fund) are troubled by liquidity, performance and concerns of being over levered, Newtek made a concerted effort over the past two years not to chase the lending market and short term profits. We tightened our lending criteria at the expense of loan volume and believe we are extremely well positioned to take advantage of what may be a major downward move in the credit cycle. Our lender is under leveraged at 46% of its collateral value, has appropriate loan loss reserves of 8.7% of its portfolio and has significant capacity in its existing bank loan facility with GE with two years remaining to maturity. We do not rely on capital markets or structured finance exits to run our lending business which, in today's market, we believe is a very positive development.

Lastly, our Lender's originated loan cumulative historic loss rate of 2.8% is below the national SBA average of 6.2%. We do believe with seasoning, however, our originated portfolio's loss rate will rise towards, but not exceed, the market average. Our hats and gratitude go out to our lending management team for its leadership and positioning in a vital but cyclical business for Newtek."

Newtek has posted a PowerPoint presentation on its website, www.newtekbusinessservices.com which will help investors follow along at the shareholder conference call scheduled for 4:15 p.m., August 9, 2007. The conference call will be accessible via a toll free number by dialing 1-866- 713-8563 and providing the pass code 75162299. Listeners are encouraged to ask any questions that they may have during the call. The conference call will also be broadcast over the internet through Newtek's website at www.newtekbusinessservices.com. To listen to the call live, please go to Newtek's website approximately 15 minutes prior to the call to download any audio software which may be necessary. For those who miss the live broadcast, a replay will be available on the website approximately one hour after the call. The online archive of the web cast will be available for ninety days following the call.

About Newtek Business Services, Inc.

Newtek Business Services, Inc. is a direct distributor to the small to medium-sized business market under the Newtek TM brand. According to the U.S. Small Business Administration, there are over 25.8 million small businesses in the United States, which in total represent 99.7% of all employer firms, generate 60 - 80% of all new jobs annually and create more than 50% of non- farm private GDP. Since 1999, Newtek has helped these business owners realize their potential by providing them with the essential tools needed to manage and grow their businesses. Newtek focuses on providing its 78,000 business accounts with access to financial, management and technological resources that enable them to better grow and compete in today's marketplace. Newtek's products and services include:

    -- Business Lending:  Business loans to start up, acquire, or expand a
       business



    -- Electronic Payment Processing:  Credit card, debit card, check
       conversion, and ACH solutions



    -- Insurance Services:  Nationwide commercial and personal lines of
       insurance



    -- Outsourced Digital Bookkeeping:  Bookkeeping and recordkeeping at a
       fraction of the cost of in-house staff



    -- Web Hosting:  Full service web host including domain registration and
       online shopping cart tools



    -- Web Design and Development:  Customized web design and development
       services for a powerful web presence



    -- Tax Preparation and Advisory Services:  Expert tax planning and
       consultation for your business



    -- Data Backup, Storage and Retrieval:  Fast, secure, off-site data
       backup, storage and retrieval



    -- Business Plan Preparation:  Professional business plan assistance
       providing a roadmap for success



    -- Payroll: Payroll management processing and employee tax filing



    For more information, go to www.newtekbusinessservices.com.

Statements in this press release including statements regarding Newtek's
beliefs, expectations, intentions or strategies for the future, may be
"forward-looking statements" under the Private Securities Litigation Reform
Act of 1995. All forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially from the
plans, intentions and expectations reflected in or suggested by the forward-
looking statements. Such risks and uncertainties include, among others,
intensified competition, operating problems and their impact on revenues and
profit margins, anticipated future business strategies and financial
performance, anticipated future number of customers, business prospects,
legislative developments and similar matters. Risk factors, cautionary
statements and other conditions which could cause Newtek's actual results to
differ from management's current expectations are contained in Newtek's
filings with the Securities and Exchange Commission and available through
http://www.sec.gov.

    Contacts:
    Newtek Business Services
    Barry Sloane
    Chairman of the Board & CEO
    212-356-9500
    bsloane@newtekbusinessservices.com







                     2007 Second Quarter - Actual Results



                           (In millions of dollars)



                                                  Pretax
                                                Net Income
                                      Revenue     (Loss)      EBITDA
    Electronic Payment Processing     13.070      0.865        1.307
    Web Hosting                        3.950      0.999        1.830
    SBA Lending                        2.609      0.217        1.088
    CAPCO                              1.720     (3.333)
    All Other                          2.188      0.199
    Corporate Activities               1.106     (1.765)
    Interco Eliminations              (1.232)
    Total                             23.411     (2.818)







               Six Months Ended June 30, 2007 - Actual Results



                           (In millions of dollars)





                                                  Pretax
                                                Net Income
                                      Revenue     (Loss)       EBITDA
    Electronic Payment Processing      25.627     1.704        2.594
    Web Hosting                         7.838     2.023        3.640
    SBA Lending                         4.924     0.210        1.917
    CAPCO                               3.356    (6.872)
    All Other                           3.707    (0.173)
    Corporate Activities                2.232    (3.776)
    Interco Eliminations               (2.464)
    Total                              45.220    (6.884)







                     2007 Segment Guidance Third Quarter



                           (In millions of dollars)



                                                     Pretax
                                                   Net Income
                                       Revenue       (Loss)       EBITDA
    Electronic Payment Processing    14.1 - 14.3    0.9 - 1.0    1.3 - 1.4
    Web Hosting                       4.0 - 4.1     0.4 - 0.6    1.3 - 1.5
    SBA Lending                       2.5 - 2.6   (0.1) - 0.0    0.8 - 0.9
    CAPCO                             1.6 - 1.7   (4.0) - (4.0)
    All Other                         1.1 - 1.2   (0.8) - (0.7)
    Corporate Activities              1.2 - 1.2   (1.5) - (1.5)
    Interco Eliminations            (1.1) - (1.1)
    Total                            23.4 - 24.0  (5.1) - (4.6)









                     2007 Segment Guidance Fourth Quarter



                           (In millions of dollars)





                                                      Pretax
                                                    Net Income
                                      Revenue         (Loss)         EBITDA
    Electronic Payment Processing    15.4 - 15.6     1.0 - 1.2     1.5 - 1.6
    Web Hosting                       4.1 - 4.2      0.8 - 1.0     1.7 - 1.9
    SBA Lending                       2.9 - 3.0      0.3 - 0.5     1.2 - 1.4
    CAPCO                             1.6 - 1.7    (4.0) - (4.0)
    All Other                         1.2 - 1.3    (0.8) - (0.7)
    Corporate Activities              1.2 - 1.2    (1.5) - (1.5)
    Interco Eliminations            (1.1) - (1.1)
    Total                            25.3 - 25.9   (4.2) - (3.5)







                         2007 Annual Segment Guidance



                           (In millions of dollars)



                                                       Pretax
                                                     Net Income
                                         Revenue       (Loss)         EBITDA
    Electronic Payment Processing      55.1 - 55.5    3.6 - 3.9     5.4 - 5.6
    Web Hosting                        15.9 - 16.1    3.2 - 3.6     6.6 - 7.0
    SBA Lending                        10.3 - 10.5    0.4 - 0.7     3.9 - 4.2
    CAPCO                               6.6 - 6.8  (14.9) - (14.9)
    All Other                           6.0 - 6.2   (1.8) - (1.6)
    Corporate Activities                4.6 - 4.6   (6.8) - (6.8)
    Interco Eliminations              (4.7) - (4.7)
    Total                              93.8 - 95.0 (16.3) - (15.1)







               NEWTEK BUSINESS SERVICES, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                     JUNE 30, 2007 AND DECEMBER 31, 2006
                  (In Thousands, except for Per Share Data)



                                                     June 30,     December 31,
                                                       2007          2006
                                                  (Unaudited)
              ASSETS
    Cash and cash equivalents                        $28,015        $26,685
    Restricted cash                                    8,966         11,275
      U.S. Treasury notes                              2,950          5,016
      Asset held for sale                                 --
          1,530
      Credits in lieu of cash                         99,054        106,425
    SBA loans held for investment (net of reserve
     for loan losses of $2,598 and $2,332,
     respectively)                                    25,998         27,746
    Accounts receivable (net of allowance of $352
     and $23, respectively)                            5,301          1,568
    SBA loans held for sale                            2,363          1,786
    Accrued interest receivable                          517            519
    Investments in qualified businesses - cost
     method investments                                  504            542
    Investments in qualified businesses - held to
     maturity debt investments                         1,919          5,301
    Prepaid and structured insurance                  16,118         17,497
    Prepaid expenses and other assets (net of
     accumulated amortization of deferred financing
     costs of $1,178 and $832, respectively)           6,820          7,682
    Servicing assets (net of accumulated amortization
     of $2,561 and $2,081, respectively)               3,016          2,991
    Fixed assets (net of accumulated depreciation
     and amortization of $5,336 and $4,065,
     respectively)                                     4,706          4,458
    Intangible assets (net of accumulated
     amortization of $7,637 and $5,919, respectively)  8,034          9,141
    Goodwill                                          13,055         10,575
      Total assets                                  $227,336       $240,737





         LIABILITIES AND SHAREHOLDERS' EQUITY
     Liabilities:
      Accounts payable and accrued expenses          $10,242         $8,509
      Notes payable                                    5,964         10,651
      Bank notes payable                              16,696         16,391
      Deferred revenue                                 2,379          2,761
      Notes payable in credits in lieu of cash        82,400         86,332
      Deferred tax liability                          21,734         24,428
       Total liabilities                             139,415        149,072



    Minority interest                                  5,246          4,596



    Commitments and contingencies



    Shareholders' equity:
    Preferred stock (par value $0.02 per share;
     authorized 1,000 shares, no shares issued and
     outstanding)                                          -              -
    Common stock (par value $0.02 per share;
     authorized 54,000 shares, issued and
     outstanding 35,910 and 35,479 not including
     583 shares held in escrow and 473 shares held
     by affiliate)                                       718            710
    Additional paid-in capital                        55,858         54,949
    Retained earnings                                 26,177         31,464
    Treasury stock, at cost (44 and 32 shares at
     June 30, 2007 and December 31,2006,
     respectively)                                       (78)           (54)
        Total shareholders' equity                    82,675         87,069



        Total liabilities and shareholders'
         equity                                     $227,336       $240,737







               NEWTEK BUSINESS SERVICES, INC. AND SUBSIDIARIES
         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
          FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
                  (In Thousands, except for Per Share Data)



                                 Three Months ended       Six Months Ended
                                       June 30,                 June 30,
                                  2007        2006         2007         2006
    Revenue:
    Electronic payment
     processing                $13,013      $10,510      $25,530      $19,942
    Web hosting                  3,943        3,310        7,820        6,474
    Interest income              1,546        1,923        3,038        3,336
    Income from tax credits      1,320        2,022        2,621        3,280
    Premium income                 797          763        1,513        1,377
    Servicing fee                  496          487          940          986
    Insurance commissions          207          188          445          432
    Other income                 2,089          223        3,313          745
    Total revenue               23,411       19,426       45,220       36,572



    Expenses:



    Electronic payment
     processing costs            9,654        7,555       18,624        14,462
    Consulting, payroll
     and benefits                5,224        4,075       10,737         8,121
    Interest                     3,614        4,577        7,336        8,885
    Professional fees            2,183        1,874        4,002        3,928
    Depreciation and
     amortization                1,803        1,527        3,531        2,882
    Insurance                      873          840        1,686        1,703
    Provision for loan losses      205          235          372          354
    Other general and
     administrative costs        2,729        2,300        5,996        4,659
    Total expenses              26,285       22,983       52,284       44,994



    Loss from continuing
     operations before
      minority interest,
      benefit for income
      taxes, and discontinued
      operations                (2,874)      (3,557)      (7,064)      (8,422)



    Minority interest               56           97          180          330
    Loss from continuing
     operations before benefit
     for income taxes and
     discontinued operations    (2,818)      (3,460)      (6,884)      (8,092)
    Benefit for income taxes       717        1,114        2,089        2,721



    Loss from continuing
     operations before
     discontinued operations    (2,101)      (2,346)      (4,795)      (5,371)
    Discontinued operations,
     net of taxes                (286)           59         (491)         356
    Net loss                   $(2,387)     $(2,287)     $(5,286)     $(5,015)



    Weighted average common
     shares outstanding:
      Basic and diluted         35,720       34,696       35,868       34,765
    Loss per share from
     continuing operations:
      Basic and diluted         $(0.06)      $(0.07)      $(0.13)      $(0.15)
    (Loss) income per share
     from discontinued
     operations, net of taxes:
    Basic and diluted            (0.01)        0.00        (0.02)        0.01



    Basic and diluted loss
     per share                  $(0.07)      $(0.07)      $(0.15)      $(0.14)

SOURCE Newtek Business Services, Inc.

Barry Sloane, Newtek Business Services Chairman of the Board & CEO,
+1-212-356-9500, or bsloane@newtekbusinessservices.com

http://www.newtekbusinessservices.com/