Non-Bank Lenders to the Rescue of Small Businesses, as Big Banks, Struggle to Meet PPP Demand

Ready Capital and Lendio | May 08, 2020

  • Ready Capital and Lendio accepted tens of thousands of applications from the smallest of businesses without imposing the strict criteria.

  • $1.3 billion of the $3 billion in approved loans have been funded, according to Ready Capital and Customers Bank.

  • The PPP program provides forgivable loans of up to $10 million to businesses with fewer than 500 employees to cover eight weeks of expenses.


As complaints mounted last month that big banks favored larger businesses over smaller ones in the $3.5 trillion federal lending program for small firms battered by the coronavirus pandemic, two little-known companies emerged as Main Street’s saviors.

Ready Capital, a non-bank lender based in New York City, and its partner Lendio, a small business loan broker, accepted tens of thousands of applications from the smallest of businesses without imposing the strict criteria demanded by large banks, such as having an existing loan with the bank.

But after approving 40,000 loans by April 16 in Round 1 of the Payroll Protection Program – the most of any U.S. lender – most of Ready Capital’s small business borrowers waited weeks for their money as the clock ticked down on their ability to survive.

To date, $1.3 billion of the $3 billion in approved loans have been funded, according to Ready Capital and Customers Bank, which stepped in to finance the loans on April 30 at the request of the Small Business Administration (SBA). Nearly $1 billion came from Customers Bank.

The vast majority of PPP loans are funded two to three days after approval, says Ami Kassar, CEO of MultiFunding, a small business loan advisor. The SBA requires approved loans to be funded in 10 days, but businesses don’t lose the money or their place in line if the deadline is missed. The problem, Kassar says, is that once loans are cleared, borrowers receive a number and aren’t allowed to apply for a loan at another lender.

“These (small businesses approved by Ready Capital) are in total limbo,” Kassar says. “They’re locked in. And they’ve still got to pay rent and make payroll.” 
 

Read More: NEW YORK ATTORNEY GENERAL ASKS MAJOR BANKS TO CLARIFY HANDLING OF SMALL BUSINESS LOANS
 

John Nahas, owner of Sharkys Woodfired Mexican Grill in Los Angeles, says Ready Capital approved his loan on April 16. If he had received it within a few days, he says he already would have rehired many of the 10 or so employees he laid off. Nahas has closed his dining area but maintained about half his staff for curbside service.

“We’re kind of holding on for dear life while everybody else has gotten funded and we’ve been kind of stuck,” Nahas says. He added that he just this week received a closing document to sign from Customers Bank and hopes to get the money within a couple of days.

The PPP program provides forgivable loans of up to $10 million to businesses with fewer than 500 employees to cover eight weeks of expenses as long as the firms retain their staffers or rehire those laid off. The loans are fully guaranteed by the SBA

Kassar says Ready Capital has had good intentions. “People were getting shut out by the big banks and there weren’t many places to go,” he says. Ready Capital “looked like the heroes of Main Street.”

But, he suggests, the firm didn’t have the systems or capital in place to process or fund such a large volume of loans so rapidly. Loan applications must be vetted for fraud and other issues.


Getting these owners the capital they require as quickly as possible is our top priority, and everyone within our company is working tirelessly to achieve this goal.

- Ready Capital


The snag, the company said, is that on April 14, after most applications were submitted, the SBA issued new guidance requiring businesses without employees to submit a document to verify wages.

“This update impacted us and our borrowers the most as we had over 9,000 sole proprietors, requiring us to go back to our applicants and request additional documentation, which contributed to the delays.”

The company added, “We have sufficient capital on hand to fund 100% of all approved loans.”

Ready Capital later said it “utilized our network of external capital sources, including Customers Bank, to help us accelerate the flow of funds into the accounts of small business owners.” Ready Capital is continuing to service the loans.

Sam Sidhu, chief operating officer of Customers Bank, says his company stepped in to finance the loans late last month because Ready Capital didn’t have adequate funding and needed help processing them. Unlike banks, non-bank lenders like Ready Capital can't receive loan funding from the Federal Reserve.

Thousands of loans are now being financed daily, says Sidhu and Brock Blake, CEO of Lendio, the online small business broker, or marketplace, that partnered with Ready Capital. Sidhu says he expects $2 billion of the $3 billion in Ready Capital loans to be funded this week but couldn’t estimate when the remainder would be completed.
 

Read More: US PROCESSES OVER $500 BILLION IN SMALL BUSINESS LOANS TO STEM CORONAVIRUS FALLOUT
 

Kassar partly blames Lendio for referring so many small business loan requests to Ready Capital. Blake says Lendio sent 30,000 of the 70,000 loan applications it received to the non-bank lender. Lendio also helps process the loans.

But, Blake adds that the current crisis is unprecedented. “Every financial institution has way more demand than they can possibly handle,” he says.

That's providing little solace to borrowers. Martina Hornjak, a real estate broker in Englewood, Florida, got Ready Capital's loan approval April 16 but still hasn’t gotten the money. With her home sales revenue down 75%, she has asked her bank to defer her mortgage payments and canceled her cable TV service. Like Nahas, she received a closing document to sign this week and hopes to have the money in a couple of days.

Meanwhile, she says, “The bills keep coming but there’s no money.”
 

About Ready Capital

Ready Capital (NYSE: RC) is a multi-strategy real estate finance company that originates, acquires, finances and services small- to medium-sized balance commercial loans. We specialize in loans backed by commercial real estate, including agency multifamily, investor and bridge as well as SBA 7(a) business loans. Headquartered in New York City, Ready Capital employs over 400 lending professionals nationwide.


About Lendio

Lendio is a free online service that helps business owners find the right small business loans within minutes. With a network of over 75 lenders offering multiple loan products, Lendio’s marketplace is the center of small business lending.
We’re usually in the business of helping others get credit, but we’ll take some here. These are some of our favorite awards:

Spotlight

You have just finished another long day. Your children love it when you arrive home to tuck them in bed and read them a story; however, you have work to do. You will make sure you read to them tomorrow morning over breakfast. You are always occupied with work. You run a business, and the pandemic has not been easy. You have had difficult decisions to make, you have had difficult conversations with staff, lots of businesses are struggling, and you know you are lucky. You are lucky to still have a business. You are feeling tired and drained; however, you need to keep going. You are not someone to give up. Your solution is to work harder. Your solution has always been to work harder. You need to work on that new proposal. It is so important that you win this proposal, as there might not be another opportunity for a few weeks.

Opportunities are Hard to Come By:

You wake up tomorrow and have received an important email overnight. You tell your children that you must go to work early again, and so can’t read them the story you promised. You need to prioritize this piece of work. 
If you are honest, every day follows a similar pattern. Deep down you would like to prioritize your family, however business has always been like this. Perhaps your feelings are akin to that football player, who is trying so hard to put the ball in the back of the net. However, the harder they try, nothing seems to go right. Would you love to feel in the zone again? To get your motivation back. To feel in control. If only there was a different way!
As individuals, we are all brought up with limiting beliefs. We are all essentially programmed very early in life due to our upbringing and environment. You could liken this to a computer that has an operating system inbuilt. The computer can never outperform the operating system.

Most individuals go through life and accept that we are the way we are, with little or absolutely no room to outpower our limitations. You have always thought that to be successful you have to work very long hours every day. Or perhaps you have always excessively worried about things and the pandemic has not helped with this. You worry the worst is going to happen. Or perhaps you suffer from imposter syndrome. You don’t feel deserving of your numerous accomplishments.

Explore Your Potential to the Fullest:

Most of the time we KNOW what to do; however, due to these limiting beliefs, we don’t do what we are capable of.  When you start to challenge your limiting beliefs, everything starts to change. When you start to talk to yourself, ‘very positively’ internally you start to feel so much better. When you learn to let go and focus on things entirely within your control, you will realize that just because others have struggled to post the pandemic you don’t have to.  There are so many businesses that have thrived after the pandemic, and you can too. 

A large number of people have re-evaluated what they want to achieve in life and in the business post the pandemic. There is never a perfect time to make these changes. When was the last time you identified what you really wanted for your business? What are your goals over the next 12 months? Not just the numbers, what is your why?  How often do you look at these goals? Do your current goals inspire you? As an entrepreneur or owner of a business firm, you need to ask the above questions aloud to yourself. When you reconnect with your “why” you will get new levels of motivation. When you start to associate creativity with a calm mind and focus; and discipline with success (essentially the right habits), as opposed to simply hard work, you will start to get time back every day. 

We Become What We Think About:

To excel in business or any professional productivity, you should start focusing your time and attention on what you are good at. Earl Nightingale said that “we become what we think about”. This is so true when we are honest with ourselves.  When you start to CHOOSE to think about the exciting new direction for your business, and the new life you are creating for your family, this will create new levels of motivation. You will then make the changes that you have been putting off for so long and will begin to lead the life that you want. By imbibing these changes, you will have time for the most important things in life; you will also start to keep your promises and will be back home in time to read that important story to your children. And what you will find is that you as "you" are more present, as you have a calmer mind, as you feel in control, you will significantly amplify your happiness quotient.

The business owners and professionals who have come out of their “not today” stage and those who have shunned their procrastination characteristics are coming out most successful in the world of business. You can make positive changes now. You may take the help of self-help guides that have proven exercises that may really help to develop a more positive mindset.  There is never a perfect time and so start today.


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SparkCognition's Award-Winning Cybersecurity Solution Providing Zero-Day Protection Now Available in Lenovo's Small Business Store

SparkCognition | February 02, 2022

SparkCognition, a global leader in artificial intelligence (AI) software solutions for business, announced its award-winning AI endpoint protection product (EPP) solution, DeepArmor, is now available in the LenovoPRO Small Business Store. "We are proud to work with Lenovo to bring our AI-enabled cyber solution to a broader range of small business users, helping them to detect and prevent even the most sophisticated zero-day cyber threats," said Vijay Doradla, President at SparkCognition. "The Deep Armor technology, based on advanced machine learning models, can help prevent never before seen cyberattacks, even while working offline, requiring less than four megabytes of space for deployment." A new cyberattack occurs every 39 seconds, putting businesses at risk of being compromised, shut down, and ransomed. SparkCognition developed DeepArmor as the first line of defense to prevent cyber threats at the edge. Built on proven AI and machine learning (ML) models, rather than rules, heuristics, and specific signatures, DeepArmor helps to prevent malware from accessing sensitive data, taking operational control, and compromising asset integrity, blocking known and new ransomware, trojans, and viruses. Its endpoint protection works both online and off, and installs and activates within minutes, without needing IT support or security skills. "Two in five small to mid-sized businesses were impacted by ransomware in 2020, with 43% lacking any type of cybersecurity defense. Extending our AI expertise and trusted and tested cyber solutions to Lenovo's small business customers is just one way we're able to work together to serve businesses in further protecting their endpoints." Marc Davis, Senior Director of Business Development at SparkCognition Lenovo is a leading OEM in cybersecurity that takes a secure-by-design approach to embed security features throughout the entire lifecycle across device components, ranging from hardware and below-the-operating-system, all the way to the cloud layers. By working with software providers like SparkCognition, Lenovo is able to offer its customers more solutions to further protect their data privacy, intellectual property, strategic investments, and customers. About SparkCognition SparkCognition's award-winning AI solutions allow organizations to predict future outcomes, optimize processes, and prevent cyberattacks. We partner with the world's industry leaders to analyze, optimize, and learn from data, augment human intelligence, drive profitable growth, and achieve operational excellence. Our patented AI, machine learning, and natural language technologies lead the industry in innovation and accelerate digital transformation. Our solutions allow organizations to solve critical challenges—prevent unexpected downtime, maximize asset performance, optimize prices, and ensure worker safety while avoiding zero-day cyberattacks on essential IT and OT infrastructure.

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Emerald Holding, Inc. to Participate in the Sidoti Summer Small Cap Virtual Conference

Emerald Holding, Inc | June 14, 2022

Emerald Holding, Inc. (NYSE: EEX) (“Emerald” or the “Company”), announced that David Doft, Chief Financial Officer, is scheduled to participate in the Sidoti Summer Small Cap Virtual Conference. The Company will hold one-on-one investor meetings on Thursday, June 16, 2022, with a company presentation at 9:15 a.m. Eastern Time. Interested investors and other parties can access a live webcast of the presentation by visiting the Investors section of Emerald’s website at https://investor.emeraldx.com. An online replay will be available on the same website following the presentation. Management will also be available for one-on-one meetings with investors. About Emerald Emerald is a leader in building dynamic, market-driven business-to-business platforms that integrate live events with a broad array of industry insights, digital tools, and data-focused solutions to create uniquely rich experiences. As true partners, we at Emerald strive to build our customers’ businesses by creating opportunities that inspire, amaze, and deliver breakthrough results. With over 140 events each year, our teams are creators and connectors who are thoroughly immersed in the industries we serve and committed to supporting the communities in which we operate. For more information, please visit http://www.emeraldx.com.

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Weave & Vetter Launch Integration to Serve Communications Solutions to American Veterinarians

Weave | January 21, 2022

Weave, the all-in-one customer communication platform for small business, and Vetter, the leading animal healthcare software technology company, announce their integration in an attempt to provide veterinarians and their front office staff with a comprehensive business solution designed to free up time spent on traditional business tasks. With this integration, Weave will automatically sync with Vetter’s data, eliminating the need for manual data uploads. Because of this automated sync, Vetter users will be able to see real-time updates to their daily calendars and patient contact information. This sync between Weave and Vetter also enables automated birthday messages, automated recall texts, confirmation writebacks, review auto-texts, and tracks patient text preferences, so offices only send messages to those who have given them permission to do so. “We couldn’t be more excited about this integration with Vetter and how it will help us achieve our mission to enable small businesses everywhere to unify, modernize and personalize every customer interaction. This integration will help veterinary practices around the world utilize our unique business solutions so they can spend more time caring for and connecting with patients and less time on the tedious tasks of running a business.” Roy Banks, CEO of Weave Vetter, the leading animal healthcare technology company, is trusted by more than 1,500 veterinarians. "We're thrilled to partner with Weave to help veterinary practices build strong, lasting relationships with their clients by bridging our practice management solution with Weave's communication solutions," said Sagi Solomon, General Manager and Founder of Vetter. "Vetter and Weave share a passion for developing innovative solutions that streamline the day-to-day operations of veterinary practices so they can spend more time caring for their patients and clients." Integration Features & Benefits Data Sync – Keep all your client contact and appointment info current with regular, automatic updates from your database to Weave. Reviews Auto-Texting – Grow your practice by sending a quick text after each appointment that invites customers to leave a Google or Facebook review. Confirmation Writebacks- Update your practice management system with how pet owners respond to appointment confirmation texts, so your schedule is always up to date. Customized Messaging – Create and send messages unique to each veterinarian, appointment type, and appointment status. Birthday Greetings – Delight your customers each year on their pet’s special day by sending them personalized Birthday Greetings automatically. Text Preferences – Track which pet owners prefer text communications, only sending messages to those who have opted in. Mobile Calendar – Know who your next patient is by quickly referencing your schedule on Weave’s mobile app. About Weave Weave is the all-in-one customer communication and engagement platform for small business. From the first phone call to the final invoice and every touchpoint in between, Weave connects the entire customer journey. Weave’s software solutions transform how local businesses attract, communicate with and engage customers to grow their business. The first Utah company to join Y Combinator, Weave has set the bar for Utah startup achievement & work culture. In the past year, Weave has been included in the Forbes Cloud 100, Inc. 5000 fastest-growing companies in America, and Glassdoor Best Places to Work. About Vetter Vetter Software, a DaySmart Company, offers better business tools for the world’s veterinarians. Our cloud practice management software is used by more than 1,500 practices to automate manual tasks, streamline workflows, and improve visibility into the health of their businesses.

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FINANCE

HSBC and Overhaul Announce Venture Debt Financing to Fund Future Growth and Expansion Globally

Overhaul | March 25, 2022

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Spotlight

You have just finished another long day. Your children love it when you arrive home to tuck them in bed and read them a story; however, you have work to do. You will make sure you read to them tomorrow morning over breakfast. You are always occupied with work. You run a business, and the pandemic has not been easy. You have had difficult decisions to make, you have had difficult conversations with staff, lots of businesses are struggling, and you know you are lucky. You are lucky to still have a business. You are feeling tired and drained; however, you need to keep going. You are not someone to give up. Your solution is to work harder. Your solution has always been to work harder. You need to work on that new proposal. It is so important that you win this proposal, as there might not be another opportunity for a few weeks.

Opportunities are Hard to Come By:

You wake up tomorrow and have received an important email overnight. You tell your children that you must go to work early again, and so can’t read them the story you promised. You need to prioritize this piece of work. 
If you are honest, every day follows a similar pattern. Deep down you would like to prioritize your family, however business has always been like this. Perhaps your feelings are akin to that football player, who is trying so hard to put the ball in the back of the net. However, the harder they try, nothing seems to go right. Would you love to feel in the zone again? To get your motivation back. To feel in control. If only there was a different way!
As individuals, we are all brought up with limiting beliefs. We are all essentially programmed very early in life due to our upbringing and environment. You could liken this to a computer that has an operating system inbuilt. The computer can never outperform the operating system.

Most individuals go through life and accept that we are the way we are, with little or absolutely no room to outpower our limitations. You have always thought that to be successful you have to work very long hours every day. Or perhaps you have always excessively worried about things and the pandemic has not helped with this. You worry the worst is going to happen. Or perhaps you suffer from imposter syndrome. You don’t feel deserving of your numerous accomplishments.

Explore Your Potential to the Fullest:

Most of the time we KNOW what to do; however, due to these limiting beliefs, we don’t do what we are capable of.  When you start to challenge your limiting beliefs, everything starts to change. When you start to talk to yourself, ‘very positively’ internally you start to feel so much better. When you learn to let go and focus on things entirely within your control, you will realize that just because others have struggled to post the pandemic you don’t have to.  There are so many businesses that have thrived after the pandemic, and you can too. 

A large number of people have re-evaluated what they want to achieve in life and in the business post the pandemic. There is never a perfect time to make these changes. When was the last time you identified what you really wanted for your business? What are your goals over the next 12 months? Not just the numbers, what is your why?  How often do you look at these goals? Do your current goals inspire you? As an entrepreneur or owner of a business firm, you need to ask the above questions aloud to yourself. When you reconnect with your “why” you will get new levels of motivation. When you start to associate creativity with a calm mind and focus; and discipline with success (essentially the right habits), as opposed to simply hard work, you will start to get time back every day. 

We Become What We Think About:

To excel in business or any professional productivity, you should start focusing your time and attention on what you are good at. Earl Nightingale said that “we become what we think about”. This is so true when we are honest with ourselves.  When you start to CHOOSE to think about the exciting new direction for your business, and the new life you are creating for your family, this will create new levels of motivation. You will then make the changes that you have been putting off for so long and will begin to lead the life that you want. By imbibing these changes, you will have time for the most important things in life; you will also start to keep your promises and will be back home in time to read that important story to your children. And what you will find is that you as "you" are more present, as you have a calmer mind, as you feel in control, you will significantly amplify your happiness quotient.

The business owners and professionals who have come out of their “not today” stage and those who have shunned their procrastination characteristics are coming out most successful in the world of business. You can make positive changes now. You may take the help of self-help guides that have proven exercises that may really help to develop a more positive mindset.  There is never a perfect time and so start today.

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