Ready Capital SBA loans review
Funding for everything from startups to expansion — but look elsewhere if you want to apply online.
Bottom line: Ready Capital offers SBA 7(a) loans designed for large expansion projects, with more flexible requirements than your average lender. But it may not be ideal when you need quick financing or to cover a small expense. Read our full review.
- SBA-preferred lender
- Special program for veterans
- Startup and franchise financing available
- Not transparent about rates and fees
- No online application
- Poor customer reviews and ratings
Our take on Ready Capital
Ready Capital one of the top 100 most active preferred lenders with the Small Business Administration (SBA), and specializes in SBA 7(a) loans for large projects. Preferred lenders have a faster turnaround on SBA loans because they have the authority to approve government-backed loans. While it specializes in commercial real estate, it also offers loans for expenses like working capital, business expansion and acquisition.
This lender can be a great for new businesses — especially those owned by former service members. It accepts startups and franchises, and has flexible revenue requirements. And it's one of one of the few lenders I've reviewed with a special loan program for veteran-owned businesses — not to be confused with the now-closed Veteran's Advantage loan program.
While it doesn't publish the range of interest rates and fees it charges, the SBA sets limits on to ensure the cost is similar to what you'd find at a bank. But it has overwhelmingly negative customer reviews. And for with loans starting at $350,000, go with another provider for small expenses.
Ready Capital offers large 7(a) loans with long terms
Ready Capital loans start at $350,000 and run as high as $5 million, with terms as long as 25 years for real estate and 10 years for other expenses.
It doesn't disclose the interest rates and fees it charges. But these are the maximum rates and fees the SBA allows on SBA loans:
- Interest rates can reach prime + 4.75% and are fixed.
- SBA guarantee fees can reach 3.5% for the first $1 million guaranteed portion of the loan. For guaranteed portions over $1 million, the SBA charges a fee of 3.75%.
- Packaging fees can reach 3% of the loan amount — though the SBA caps it at $30,000. Ready Capital would charge this if it assists you with the application.
- Servicing fees are typically 0.55% of the loan's principal each year.
Other fees may apply — like a prepayment penalty on real estate loans. You can learn about with our guide to SBA loan fees.
Ready Capital PPP loans
You can't apply for a Paycheck Protection Program (PPP) loan with Ready Capital — or any lender. But if you already have a PPP loan with the lender, Ready Capital is accepting applications through its website. You can find a list of required documents and monitor your forgiveness application by logging in to the Ready Capital portal.
Faster alternatives to Ready Capital
Ready Capital's SBA-preferred status makes it faster than your typical SBA lender. But the application can still be time-consuming, especially compared to an online lender. If you don't have a lot of time to spend on the application, fill out the form on our table to compare SBA providers with online applications.
Ready Capital reviews are mostly negative — and about the PPP
|BBB customer reviews||1 out of 5 stars, based on 40 customer reviews|
|BBB customer complaints||7 customer complaints|
|Trustpilot Score||3.8 out of 5 stars, based on 965 customer reviews|
|Customer reviews verified as of||24 August 2021|
Ready Capital gets mostly negative customer reviews and an F rating from the Better Business Bureau (BBB) for not responding to customer complaints. The overwhelming majority of reviews are complaints are over the PPP loan application process — though a handful of customers customers say it was quick and efficient.
Ready Capital requires good credit on top of SBA criteria
In addition to meeting the SBA's basic requirements, you must have a personal credit score 680 or higher to be eligible for a Ready Capital loan.
It also asks small business owners to make an equity injection of at least 10% for most projects. Veteran-owned businesses may be able to avoid the equity injection requirement — but could be required to pay up to 20% of the project's costs.
Ready Capital also has a relatively low debt service coverage ratio (DSCR) requirement of 1.15 on most loans. This means that your business must have a net operating income equal to at least 1.15 times the amount of debt in its name while its repaying the loan. This DSCR requirement is on the lower end for a lender that specializes in real estate — banks typically ask for a DSCR of at least 1.2 on real estate loans.
Ready Capital's preferred status and startup financing set it apart
Not only is Ready Capital an SBA-preferred lender, it's one of the most active SBA 7(a) providers in the country. In 2021, it funded 247 SBA 7(a) loans worth to total of nearly $308 million — as of June 30th.
It's also one of the few SBA lenders out there that accepts businesses in the startup phase. With no hard-and-fast revenue requirements and a low DSCR cutoff, this provider may be a good option for businesses that struggle to qualify for an SBA loan at a bank.
Ready Capital is a legitimate nonbank lender
Ready Capital might have a high volume of negative customer reviews, but it's still a legitimate company. The SBA vets lenders for legitimacy before authorizing them to provide government-backed loans. And Ready Captial's SBA preferred status means that it met even higher standards than your typical SBA lender.
See how Ready Capital compares to our picks for the top SBA lenders before you apply.