ReadyCap Lending Review
- Date Established
- 2012
- Location
- Albany, NY
Pros
- Suited for small businesses
- Low interest rates
- Competitive terms & fees
Cons
- Unsuited for large businesses
Overview
ReadyCap Lending LLC is a non-bank lender that specializes in Small Business Administration loans. This subsidiary of Ready Capital is an SBA Preferred Lender. Small business owners that work with ReadyCap Lending can apply for the SBA 7(a) and 504 loan programs, which are affordable alternatives to bank or credit union loans. Because SBA loans are backed by the government, lenders like ReadyCap Lending are more confident in funding small business owners, opening up financing opportunities that would otherwise be impossible.
SBA loans through ReadyCap Lending provide low-cost, long-term financing options for starting, operating, or expanding your small business with anywhere between $350,000 to $5 million. Through the 7(a) program, you can use your funds for almost any business purpose, including purchasing or refinancing commercial real estate, consolidating high-interest debt, acquiring a business, buying a franchise, purchasing equipment, or funding startup costs.
With a 504 loan, you can receive up to 50% of financing for your project. A Certified Development Company, or CDC, will fund 40% of project costs, leaving you with as little as 10% to pay. 504 loan proceeds can be used to purchase land or existing commercial buildings, finance construction or renovation costs, or buy fixed equipment for your business.
ReadyCap Lending has been in operations since 2012 and specializes in helping small business owners receive affordable loans with low down payments and interest rates, longer terms, and more flexibility than other options on the market today.
Table of Contents
Services Offered
Borrower Qualifications
ReadyCap Lending does not provide all borrower requirements for its loans directly on its website. However, the lender does state that the debt service coverage ratio (DSCR) for its SBA loans should be 1.15 to 1.30 depending on how loan proceeds will be used and the industry of the borrower. Learn more about calculating DSCR and how it’s used by lenders.
Additional borrower qualifications are available from the SBA. The SBA sets basic requirements for its loan programs, and this information is readily available on the association’s website, which can be accessed via ReadyCap Lending’s site.
Learn more about the requirements for each program below:
7(a) Loan Program
To qualify for the SBA 7(a) loan program, the following requirements must be met:
- Qualify as a small business based on SBA size standards
- Be a for-profit business
- Must use loan funds for business purposes
- Credit score of 640 or above
In addition to your personal credit score, your credit history will be evaluated. Your credit report should be free of liens, bankruptcies, foreclosures, and defaults on government-backed loans.
Collateral may be required in order to secure your loan. Business assets typically serve as collateral. However, if you fall short, personal real estate or property may be used as collateral. It’s also important to note that the SBA will not turn down applications solely based on a lack of collateral provided the borrower meets all other requirements.
504 Loan Program
To qualify for the 504 loan program, your business must meet the following requirements:
- Have a net worth of $15 million or less
- Have an average net income of $5 million or less after federal taxes for the 2 years prior to applying
- Be a for-profit business
- Have a credit score of 640 or above
Similar to 7(a) loans, your credit report should be free of any potential red flags — foreclosures, bankruptcies, or past defaults.
With the 504 loan, you must also find a CDC that is willing to fund 40% of the project costs.
For this type of loan, a down payment may be required. Typically, you’ll only pay 10% of the total project costs, but you may be required to pay as much as 30%. No collateral is usually needed, as the real estate, land, or equipment that is financed serves as collateral.
Additional requirements may need to be met to receive a loan through ReadyCap Lending. To learn more about borrower requirements, you can request a quote or submit an inquiry through the company’s website.
Unsure of which loan is best for you? Check out SBA 504 vs. 7(a) Loans: Which Is Right For Your Business?
Terms & Fees
Rating: Excellent
ReadyCap Lending provides an overview of loan terms and fees on its website. Loans in amounts of $350,000 to $5 million are available. Equity injections of 0% to 20% are required. Equity may include seller notes or gifted funds. Repayment terms are up to 25 years. Up to 100% financing is available depending on how proceeds will be used and your industry. Closing costs may be financed.
There are no prepayment penalties for non-real estate loans. On real estate loans, prepayment penalties will apply for the first 3 years.
One of the best things about SBA loans is that maximum rates are set by the SBA, keeping them affordable for small business owners. Take a look at the loan rates for SBA 7(a) and 504 loans for current interest rates.
| Loan Amount | Less Than Seven Years | More Than 7 Years |
|---|---|---|
Up to $25,000 | Base rate + 4.25% | Base rate + 4.75% |
$25,000 – $50,000 | Base rate + 3.25% | Base rate + 3.75% |
$50,000 or More | Base rate + 2.25% | Base rate + 2.75% |
For 7(a) loans, maximum rates through Ready Capital are the base rate plus 2.25% for loans with repayment terms less than 7 years. For loans with repayment terms of 7 years or longer, the maximum interest rate is the base rate plus 2.75%.
| SBA 504 Loans | |
|---|---|
Borrowing Amount | No maximum, but the SBA will only fund up to $5 million |
Term Lengths | 10 or 20 years |
Interest Rates | Fixed rate based on US Treasury rates |
Borrowing Fees |
|
Personal Guarantee | Guarantee required from anybody who owns at least 20% of the business |
Collateral | Collateral required; usually the real estate/equipment financed |
Down Payment | 10% - 30% |
Interest rates for 504 loans are based on the market rate of 5-year and 10-year U.S. Treasury issues.
Guarantee fees are required to receive an SBA 7(a) loan. Guarantee fees start at 3% for loans of $150,000 to $700,000. This rate increases to 3.5% for loans of $700,000 to $1 million. When a loan exceeds $1 million, a guarantee fee of 3.5% applies to the first $1 million and an additional 0.25% is charged on the amount exceeding $1 million.
Other fees may be associated with an SBA loan. These include but are not limited to:
- Late Fees
- Service Fees
- Origination Fees
- Packaging Fees
- Closing Costs
All fees, interest rates, and terms can be discussed with a professional at ReadyCap Lending.
Application Process
Rating: Excellent
To start the application process with ReadyCap Lending, you can submit a quote request through the company’s website. On the request form, you provide a small amount of personal information, including your name, email address, phone number, city, and state. You can also type a message on this form providing additional details of your request.
Once you’ve submitted your request, a product representative will get in touch with you to discuss the financial products that may be a good fit for your business. If you decide to move forward with a loan, you’ll receive more details on the application process, qualification requirements, and documentation needed to complete your loan request.
Sales & Advertising Transparency
Rating: Good
ReadyCap Lending is about average when it comes to sales and advertising transparency. The company does provide some basic information about its loans, including the types of loans available, how funds can be used, maximum borrowing limits, and some borrower requirements. The company’s website does not fully disclose all interest rates, fees, and borrower qualifications for its loans. However, it does link to the SBA website, which provides a great deal of information and resources for small business owners new to SBA loans.
Customer Service & Technical Support
Rating: Excellent
Prospective and current customers can get in touch with ReadyCap Lending through its website, which has separate secure forms for requesting quotes and general inquiries.
Its parent company, Ready Capital, is also on social media and shares current news and updates through its Facebook, Twitter, Instagram, and LinkedIn profiles.
User Reviews
Rating: Good
Negative Reviews & Complaints
There are few negative reviews or complaints about ReadyCap Lending online. Sites that traditionally have reviews and complaints, including the Better Business Bureau and Trustpilot, do not have any reviews – positive or negative – for ReadyCap Lending or its parent company Ready Capital.
On Yelp, however, the company has a 3.5-star rating based on three reviews. The user that gave the company a negative review complained about customer service, the length of time it took to submit a loan, and problems encountered when receiving a refund on a deposit.
Positive Reviews & Testimonials
There are few positive reviews online for ReadyCap Lending, similar to the negative reviews. However, the company does have two 5-star reviews on Yelp. ReadyCap Lending also has customer testimonials on its website. Overall, customers were pleased with:
- Excellent customer service
- Competitive rates & terms
- Fast approvals
- Excellent communication & transparency
Final Verdict
Small business owners that are having difficulties navigating SBA loans can make the process easier by working with an SBA Preferred Lender like ReadyCap Lending. Through ReadyCap Lending, small business owners and entrepreneurs can access affordable, long-term SBA loans to start or expand their businesses.
Although ReadyCap Lending’s online information is lacking in some ways — for example, there is no online application, documentation checklists, or lists of fees or borrower requirements — the company has a proven track record of securing SBA loans, as evidenced through its positive reviews, testimonials, and client transactions.
| Lender | Borrowing Amount | Term | Req. Time in Business | Min. Credit Score | Next Steps | |
|---|---|---|---|---|---|---|
| $5K - $500K | 3 - 36 months | x1.003 - x1.04/mo | 12 months | 600 | Apply Now |
| $5K - $500K | 13 - 52 weeks | x1.029 - x1.1872 | 9 months | 550 | Apply Now |
| $2K - $5M | Varies | As low as 2% | 6 months | 550 | Apply Now |
| $20K - $500K | 1 - 4 years | 7.99% - 29.99% APR | 2 years | 660 | Apply Now |
Erica Seppala
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