ReadyCap Lending has acquired CIT Small Business Lending from its parent CIT Group, including $1.3 billion in servicing rights on loans guaranteed by the U.S. Small Business Administration.
The acquisition will enable ReadyCap to provide commercial real estate-secured financing, including conventional real estate first lien, bridge and SBA 7(a) loan products, according to a Thursday press release. ReadyCap is also acquiring one of the 14 nonbank SBA licenses previously authorized by the SBA and will license the rights to use certain CIT origination and servicing systems.
ReadyCap said it plans to retain "a majority of the small business lending staff," which includes the SBA lending group headquarters in Irvine, Calif. and a New Jersey-based operation.
The servicing rights portfolio is the largest among nonbank lenders of SBA 7(a) loans and includes a $370 million nonguaranteed retained participation interest. The SBA 7(a) is a type of government-backed small business loan designed to help start-up and existing small businesses with general business development financing for real estate transactions, equipment purchases and other purposes.
The CIT Small Business Lending unit launched in 1993 and has historically been one of the largest SBA 7(a) loan originators, according to the press release. The $33 billion-asset CIT Group also specializes in small to middle sized commercial businesses in more than 30 industries.
ReadyCap Lending is a subsidiary of ReadyCap Commercial in Orange County, Calif., which specializes in financing for small-balance investment, multifamily and bridge loans of $500,000 to $10 million. Since its inception in 2013, ReadyCap Commercial has originated approximately $250 million in conventional commercial mortgages. It is a subsidiary of Sutherland Asset Management Corp., a privately-held real estate investment trust.
The acquisition of the CIT platform "represents a major step in the growth of our company," said Sutherland CEO Tom Capasse, and will allow ReadyCap to provide loans "to small business owners who may not qualify for funds through conventional commercial loan products."