Small Business

OVERVIEW

Ready Capital, through its subsidiary ReadyCap Lending, LLC, is an approved non-bank, U.S. Small Business Administration (SBA) Preferred Lender
Offers secured and unsecured financing nationwide to small business owners
Provide loans from $350,000 to $5 million
Flexible terms and competitive loan rates to fund a range of business needs
Longer terms, lower down payments and more flexibility than other types of business financing, to improve cash flow as you expand or start your business

Closing costs may be financed
Equity injection may include seller note or gift funds
Working capital may be included
Story driven underwriting
Low down payment
Longer terms
More flexibility
Fixed rate available for those who qualify

Q&A with John Moshier - President of SBA Lending

1. How has the Economic Aid Act enhanced the 7(a) program?

The Economic Aid Act passed by Congress in December 2020 included economic aid for small businesses which were hit particularly hard by the pandemic. For 7(a) borrowers and lenders, the most significant change was a temporary enhancement to the terms of the program. Congress not only increased the loan guarantee to 90%(instead of 75%)but also cut the guarantee fees required of borrowers in the program. Also, the Act extends the small business debt relief program, so some borrowers have become eligible for deferred payments of principal and interest.

2. Why does the fee waiver matter to borrowers?

The fee waiver can save a significant amount of money for a borrower. Normally, under the 7(a) program, a borrower has to pay a guarantee fee of as much as 3.5%. Over the life of a loan, that can become a significant added expense. For example, imagine a borrower with a $1 million loan. Under the normal 7(a) rules, that borrower would have to pay a fee that would accrue to about $50,000 when compounded. But for the moment, that fee is waived until the appropriation runs out. We think the fee waiver creates a big opportunity for borrowers, but it is tied to the temporary enhancement which is likely to wind down soon.

3. What about the deferred payments?

Some borrowers may qualify for up to three months of deferred payments under the temporary enhancement. The attractiveness of this opportunity speaks for itself as any borrower will benefit by omitting the first few months of payments. In many cases, the deferral can even qualify for forgiveness, so the borrower is effectively reducing their total loan balance.

4. Does this broaden the client base for 7(a) loans?

For lenders, this temporary change enhances the lending appetite because the higher guarantee—90% instead of 75%—helps reduce their risk. While the 7(a) program obligates SBA lenders to comply with the SOP guidance for an eligible borrower, lenders typically make choices about which industries and regions fit their credit profile. There might be a borrower whose credit profile under normal circumstances would fail to match with the lender’s ideal profile, but in this temporary situation, the same lender may alter their ideal profile in an effort to help fund more businesses. As a result, some higher-risk borrowers may now have a better opportunity to qualify for a 7(a) loan than they will if they wait until after the temporary enhancement period ends.

5. When will the temporary enhancement end?

This temporary enhancement was rolled out when Congress authorized the appropriation associated with the Economic Aid Act. SBA lenders cannot forecast whether Congress will authorize a new appropriation, but it is prudent to assume that this enhancement is unlikely to be renewed. The end of the period is determined not by the calendar but by the budget—when the appropriation runs out, the temporary enhancement ends. An educated guess would point to June or July of 2021 as a likely end date for the enhancement. For that reason, borrowers should consider applying for a 7(a) loan now.

“Ready Capital” is a trade name encompassing ReadyCap Lending, LLC, ReadyCap Commercial, LLC, and other businesses operated by Ready Capital Corporation. This document is provided for information and discussion only and does not constitute an offer or commitment to extend credit. Any information including facts, opinions or quotations, may be condensed or summarized and are expressed as of the date of writing. The information may change, and Ready Capital Corporation and its affiliates/subsidiaries are under no obligation to ensure that such updates are brought to your attention. Ready Capital is not affiliated with or endorsed by any government agency, department, or bureau. All the opinions, conclusions, or recommendations expressed are those of Ready Capital and do not reflect the views of any government agency, department, or bureau.

INDUSTRIES

Ready Capital is a national direct lender that specializes in providing financing solutions to a wide range of industries. Our team of specialists understands the value of your business as well as the people who operate the practice and the communities that they serve.

Loan Programs:

Owner Occupied Real Estate
Business and Partner Buyouts
Real Estate Loans
Renovations & Expansions
Working Capital
Practice Acquisitions
Debt Consolidation
Construction
Equipment

Loan Terms:

Creative Financing Structures
Up to 25 Year Loans
Competitive Interest Rates
Flexible Payment Structures

MEDICAL

DENTAL

LOGISTICS

SELF
STORAGE

FUNERAL
HOMES

INSURANCE
AGENCIES

LEGAL
ACCOUNTING

WAREHOUSE

ASSISTED
LIVING

HOSPITALITY

CHILDCARE

LIQUOR
STORES

PHARMACY

VETERINARY

CONVENIENCE
STORE /GAS STATION

Mili Shah, Esq.

Vice President, Business Development Officer
770-480-4585
mili.shah@readycapital.com

Piscataway, NJ

Mili Shah hails from Atlanta, Georgia. She graduated New York University and then received her JD/MBA at The University of Tennessee. She practiced commercial real estate law, representing lenders and borrowers, at Kitchens Kelley Gaynes, P.C in Atlanta. Her experience as an attorney helped her pursue a career in banking, where she served as the SBA Lending Director of Vantage Bank Texas. She has closed several SBA 7a and 504 loans. Her expertise is in hotel lending and she has maintained relationships with franchisors and franchisees on various lending platforms.

Specialties:

Small Business

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RECENT TRANSACTIONS

Fitness and Recreational Sports Centers
Take- Out Construction
$1,450,000
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Fort Collins, CO

Full-Service Restaurants
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Insurance Agency
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Dentists' Office
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Liquor Store

$403,500
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Gasoline Stations with Convenience Stores

$1,694,000
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Military Makeover

Ready Capital is a proud partner with the Military Makeover Series. Every quarter we will be sponsoring a veteran in the makeover of their homes. We proudly support Veterans and those who own small businesses by offering incentives for Veteran-owned businesses.

CAREERS

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Ready Capital is always looking to add experienced and driven professionals to expand and grow with our company. We are continually searching for experienced professionals within the industry by offering a work environment thriving on collaboration and a corporate culture of employees who are passionate and excited about what they do.

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