DR Bank To Launch Small Business Lending Division
The bank will use its digital partnership with iBusiness Funding to expand credit access for small business operators.
Updated on Oct. 26, 2026 in Financial Services
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DR Bank plans to launch a new division focused on Small Business Administration (SBA) lending. The Connecticut-based bank will partner with iBusiness Funding to facilitate digital loan applications as it expands its commercial banking footprint.
Why it matters
The bank is pivoting toward government-backed lending to scale its innovation banking model. This move follows a period of significant growth, with net income rising from $1.9 million in 2021 to $12.5 million in 2025.
DR Bank reported net income of $10.8 million in the first half of 2026, already nearing its $12.5 million total from 2025. The bank, which currently holds $1.1 billion in assets, plans to expand staff across technology and compliance roles in 2027 to support the new vertical.
The players
DR Bank
A Connecticut-based financial institution with $1.1 billion in assets that provides sponsor-bank services to various fintech companies.
Jason Hardgrave
The CEO of DR Bank who has led the organization since June 2021.
iBusiness Funding
A digital lending platform and subsidiary of Ready Capital that facilitates small business loan applications.
The details
The bank will leverage its existing sponsor-bank framework to manage the underwriting process for SBA loans. By integrating with iBusiness Funding, a subsidiary of Ready Capital, DR Bank aims to digitize the application flow while using its proprietary cash-flow analysis systems to evaluate small business creditworthiness. This approach mirrors its current service model for fintech partners like Upstart and ClarityPay.
Timeline
2006: Darien Rowayton Bank was founded.
2019: DR Bank sold its Laurel Road student-lending subsidiary to KeyCorp.
June 2021: Jason Hardgrave became CEO of DR Bank.
First six months of 2026: DR Bank generated $10.8 million in net income.
2027: DR Bank plans to increase staffing levels.
Market Landscape
This move marks a shift from the bank's previous portfolio, which was anchored by the $4 billion student-loan business it sold to KeyCorp in 2019. By pivoting to SBA lending, the bank is following a strategy centered on high-growth commercial verticals rather than consumer credit.
Small business owners should prepare for new capital access channels as DR Bank scales its digital lending platform. Operators in the innovation banking space should monitor the bank's 2027 hiring cycle as an indicator of its intended growth rate in the commercial lending market.
The takeaway
DR Bank is repositioning itself as a digital-first commercial lender by leveraging its existing fintech sponsor-bank infrastructure. Interested operators should track the bank's official announcements in 2027 for specific lending requirements and application windows.
What happens next
DR Bank intends to execute a hiring expansion in 2027, adding personnel across its technology, finance, compliance, and operations departments to support the new lending division.
Further reading
For more on industry shifts in regional banking, visit Financial Services.
Source note: This article includes information reported by American Banker.
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