ReadyCap Lending, a licensed lender for the U.S. Small Business Administration’s 7(a) program, is marketing a new securitization of its non-guaranteed interests in a pool of program loans.
ReadyCap Lending Small Business Loan Trust 2019-2 is a transaction of $131.03 million in Class A notes, secured by a pool of 1,101 small-business loans totaling $155.25 million in outstanding balances. Most of the non-guaranteed portions of the loans subject to the pool are backed by commercial real estate, according to a presale report from S&P Global Ratings.
S&P has assigned preliminary BBB- ratings to the Class A notes, which benefit from 15.6% credit enhancement.
The loans, which have weighted average original terms of 267 months, are seasoned at average of 69 months. The loans are predominantly first-lien, adjustable rate loans that involve business acquisition funding (27.3% of the pool balance) and real estate purchases (27.2%).
The largest sector exposures were in hotels/motels (18.6%), dentist offices (9%) and child daycare services (8.6%).
The transaction is ReadyCap’s first SBA loan securitization in four years. About 55% of the unguaranteed interested were originated by ReadyCap in the years since it acquired its SBA license and a portfolio of SBA 7(a) loans in 2014 from CIT Group.
ReadyCap is headquartered in New Providence, N.J., and services a portfolio of real-estate backed loans totaling $918.9 million, as of Sept. 30. It is a subsidiary of Ready Capital (NYSE: RC), a commercial mortgage REIT formed in 2011.
ReadyCap is externally managed by investment advisor Waterfall Asset Management, which has $7 billion in assets under management.
