Direct Capital Small Business Loan Review

About Direct Capital

Direct Capital

Direct Capital, a Division of CIT bank offers business owners the speed of an online lender with the low rates and stability of a bank. That is why 8 out of 10 of our customers would recommend us to a friend. Whether you need to purchase equipment, hire more employees, attract new customers or acquire more inventory, Direct Capital is your source. With a simple application, streamline underwriting and fast closing we can quickly provide you with the funds you need to grow your business. With rates as low as 6% we are not only fast but affordable!!!

What is Direct Capital?

Direct Capital is an online lending provider that offers financing and leasing solutions for small- and mid-sized businesses.

Based in Portsmouth, N.H, Direct Capital was founded in 1993 and acquired by CIT Bank, a division of CIT Group Inc. in 2014. The company specializes in three types of financing options: equipment financing, working capital and franchise financing.

Their website boasts that, unlike most traditional banks and lenders, getting a short-term loan with Direct Capital can happen in as fast as one day. Today the company has lent over $4 billion to more than 100,000 small and mid-sized business over the last 25 years.

Why Choose Direct Capital?

Direct Capital has a strong reputation as a small business lender, earning an A+ rating with the Better Business Bureau (BBB).

The company was named a winner of the 2017 Operations and Technology Excellence Award by the Equipment Leasing and Finance Associate (ELFA). The award recognizes financial companies that use innovative technology to improve the customer experience. Direct Capital was specifically recognized for their proprietary technology that enables small business owners to complete the entire loan application process online, in under 30 minutes.

With a Direct Capital loan, you can borrow up to $500,000 with terms ranging from six months to seven years. Annual interest rates (APR) vary depending on the borrower’s credit history and loan amount.

Compared to other lenders, Direct Capital offers flexible payment schedules – daily, weekly or monthly. However, the flexibility allowing borrowers to select their best repayment plan might come at a price. The company does not disclose the maximum APR for small business loan options until after the application is approved.

Whether you’re just starting your business or you’re an established business owner, a loan with Direct Capital can be used for a variety of business expenses, such as:

  • Purchasing inventory
  • Marketing expenses
  • Leasing or purchasing equipment
  • Acquisitions
  • Remodels

What Direct Capital offers?

Direct Capital offers three types of business loans for new or established businesses: equipment financing, working capital and franchise financing.

Equipment financing. Direct Capital has a team of sales and underwriting professionals who specialize in designing customized equipment financing programs for businesses across a wide range of industries. These programs are good for businesses that don’t have the money upfront to pay for the necessary equipment to run their business.

One major benefit of equipment financing or leasing equipment is the big tax incentive. Businesses that lease or purchase equipment can deduct the full purchase price, up to one million dollars, for the current tax year.

Working capital: A working capital loan is a short-term business loan that can be used for a variety of business expenses. Whether you want to remodel or purchase inventory, borrowers can receive same-day financing once approved.

Franchise financing: Franchisees can access up to $500,000 application only or up to $1 million with financials by utilizing Direct Capital’s online application. If you’re looking to expand your business portfolio by opening up another franchise location or need new equipment, franchise financing helps business owners get the money they need.

Direct Capital: At a glance
Loan product Loan amount Loan term APR range/ factor rate Fees Time to funding
Equipment Financing Up to $500,000 6 – 72 months As low as 5.49%* Fixed or floating rates Undisclosed As fast as 1 day
Working Capital Up to $150,000 6 – 18 months As low as 9.99%* $0 As fast as same day
Franchise Options Up to $500,000 (up to $1,000,000 with financials) 6 – 84 months Varies by product $0 As fast as 1 day

Rates current as of 6/6/2018
*For qualified customers

In addition to business loans, Direct Capital customers have access to CIT Bank’s personal banking products. The company offers online banking products like high-yield savings accounts and certificates of deposit (CDs).

Eligibility requirements

Direct Capital declined to provide specific borrower qualifications or required FICO scores. Their customer service representative simply stated that not all applicants will qualify for a loan – it’s a case-by-case basis.

However, some sources have published $12,000 in monthly revenue and two-plus years in business as the borrowing requirements for Direct Capital. Their online Quote Tool assumes a FICO score of 700+ and a minimum of 2+ years in business.

During the early stages of the application process, Direct Capital will pull your personal FICO credit report. Your FICO credit score is used to help determine if you are an eligible candidate for a loan.

Credit score considerations

In addition to the borrower’s personal credit score, if you’re an established business, Direct Capital will request the credit report of the business from Dun and Bradstreet. This report helps Direct Capital identify how much credit should be issued to your business based on previous credit history, payments and other risk factors.

Businesses that are not eligible for Direct Capital loans

Direct Capital offers funding in almost any industry, however, approval is on a case-by-case basis. The following industries are not eligible for funding from Direct Capital:

  • Tobacco, marijuana, and narcotics
  • Lottery
  • Check cashing
  • Adult entertainment and/or materials
  • Firearms

How to apply for Direct Capital financing

The Direct Capital application and lending process is completely online, which makes it a highly convenient option. Customer service representatives are also available by phone to answer any questions you may have during the application process.

Get an instant quote. To gain a better understanding of financing options, the Get a Custom Quote tool allows potential borrowers to estimate their monthly payment amount based on the loan amount, term length and type of loan selected on the tool.

For example, if you’re looking to buy an oven for your restaurant that costs $25,000 with a desired term length of 60 months, you can expect to pay $540 a month over the next five years.

This tool is especially helpful for borrowers who are researching loan options, but are not ready to complete the application process.

Instant application. To apply for financing, you’ll need to answer questions about yourself, your business and the amount of money you want to borrow. Once you click submit, your application will go through a rigid internal verification process.

As a subsidiary of CIT bank, Direct Capital has to abide by federal and state banking regulations. A loan representative will contact you to request and verify documents. The requirements vary depending on the type of loan and the loan amount.

Documents to apply:

  • A copy of your driver’s license
  • Three years of income tax returns
  • Voided check from personal and/or business account
  • Bank statements


Pros Cons
  Flexible financing options   Unclear fees
  Customer service   Opaque minimum loan qualifications
  Fast financing   Negative customer reviews online

Who is the best fit?

Direct Capital is a good option for an established small- or mid- sized business that needs quick access to cash. Traditional business loans can take weeks or even months to be approved for a business loan, so if you’re looking to get financing fast, an online lender such as Direct Capital may be a good choice for you.

The bottom line: How Direct Capital stacks up

Direct Capital charges origination fees for some of its loans. The amount of this fee varies by the specifics of the loan agreement. It’s always important to speak with your loan representative about any questions you may have so you’re not surprised by unexpected fees or costs.

When it comes to finding the best lender for your business’s needs, it’s always important to shop around. Once you select your lender, your credit score and borrowing history will be one of the most influential factors in determining your qualification status.

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