DR Bank to Launch Small Business Lending Division
The Connecticut-based institution will partner with iBusiness Funding to facilitate digital small business loans.
Updated on Oct. 26, 2026 in Financial Services
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DR Bank plans to launch a Small Business Administration lending division to expand its innovation banking and sponsor-bank business models. The bank will utilize a partnership with iBusiness Funding, a subsidiary of Ready Capital, to connect with and process loan applicants.
Why it matters
The bank views this expansion as a natural progression of its existing operations and experience providing sponsor-bank services to companies like Upstart and JG Wentworth. This move represents a strategic effort to broaden the institution's business verticals following significant growth in net income over recent years.
DR Bank reported net income of $10.8 million during the first half of 2026, building on an annual net income of $12.5 million in 2025. The firm currently holds an asset value of $1.1 billion.
The players
DR Bank
This Connecticut-based financial institution provides innovation banking and sponsor-bank services to various fintech companies.
Jason Hardgrave
He has served as the CEO of DR Bank since June 2021.
iBusiness Funding
This digital lending platform is a subsidiary of Ready Capital and will partner with DR Bank to facilitate loans.
KeyCorp
Based in Cleveland, this financial services company acquired the Laurel Road subsidiary from DR Bank in 2019.
The details
The bank will leverage its experience providing cash-flow analysis for its current sponsor-bank clients to evaluate new small business loan applicants. Following this launch, the bank expects to increase its staff across technology, finance, compliance, and operations throughout 2027.
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: The bank generated $10.8 million in net income.
2027: The bank plans to increase its staffing levels.
Market Landscape
The bank is entering the Small Business Administration lending program to capitalize on its existing experience with sponsor-bank models. This strategic pivot allows the firm to compete in a wider segment of commercial finance against other established lenders.
Small business owners in Connecticut and nationally may soon gain access to a new source of capital through the bank's digital loan application platform. This partnership intends to streamline the borrowing process for local entrepreneurs seeking government-backed financing.
The takeaway
DR Bank's expansion highlights a broader trend of regional banks adopting digital-first partnerships to penetrate niche commercial lending markets. Customers should anticipate potentially faster processing times as the institution integrates its sponsor-bank technology into these new offerings.
Further reading
Learn more about the local industry by visiting the Financial Services section.
Source note: This article includes information reported by American Banker.
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