Direct Capital Reviews: What to Know

Direct Capital Reviews: What to Know
Rissa Ann
on July 4, 2017
Read in 3 min

Direct Capital specializes in helping people who want to start a business or who want to increase the size of their existing operation.

Direct Capital Reviews

One of the few online lenders with an active social media presence, potential borrowers and existing customers can engage in conversations with the brand on their favorite platforms, like Facebook, Youtube, Twitter, and LinkedIn.

Reputation

Direct Capital has maintained a Better Business Bureau Rating of A+ with a composite score of 4.34 out of 5 stars.

They have also established an average score of 9.2 from Trust Pilot.

A Quick History Lesson

The company was incorporated in December of 1993, in Portsmouth, New Hampshire, and they now have offices in California, Georgia, New Hampshire, and New York.

Since getting acquired by CIT bank in 2014, Direct Capital has increased its reach in the market and has made significant strides towards improving the customer service experience of their clients.

In the nearly fifteen years working with business owners, they’ve provided $4 billion in financing to more than 100,000 small business owners across 1,000 industries.

Direct Capital Review: Eligibility & Application Process

One of the things about Direct Capital is the customer-focused nature of their website, application, and eligibility process.

Offering business owners equipment financing, working capital loans, and franchise financing, their preliminary online process can take about three minutes to complete.

In fact, the entire application process is completed digitally, including contracts and other paperwork which are sent via email to be signed and returned.

And if you get denied, you could potentially reapply in as little as six months!

For those who prefer to speak to a person, they also take applications over the phone.

Credit Requirements

As part of the preliminary application process, Direct Capital will pull your credit score.

If the minimum credit score requirements are met, they may request additional information.

One of the requirements is that borrowers maintain an average bank balance of $3,000 and a minimum of 7 monthly deposits.

Required Documents

Direct Capital reviews the following required documents before approving loans:

  • three months of bank statements for the business
  • a copy of the borrower’s driver’s license
  • a certificate of good standing
  • one year of tax returns for the business
  • and a voided business check.

The good news?

Direct Capital reviews ALL applications – Even from borrowers with tax liens and who have filed for bankruptcy (you may still qualify if it’s been at least 3 years since the bankruptcy discharge.)

Working with Direct Capital

While the company prefers to work with borrowers who own 100 percent of their business, they may work with those who have at least 50 percent stake in the business.

NOTE: Direct Capital will not work with those business owners who have an existing arrangement with another lender that requires debt be repaid on a daily basis.

Once you are approved for a loan with Direct Capital it is possible to monitor the status of the loan by logging on to their secure online portal.

Borrowers with daily repayment plans will have their first payment withdrawn from their account the business day following the loan being funded.

Those who want to pay their loan off more quickly are encouraged to do so as Direct Capital does not impose a penalty for prepayment.

On the other hand, loan renewals are evaluated on an individual basis and can be applied for once 40% of the original loan is repaid.

Equipment Financing

Purchasing equipment is essential in many industries but can be cost prohibitive for small and mid-sized businesses.

Direct Capital can offer equipment financing in many industries.

Qualified borrowers may finance up to $250,000 with only an application, or up to $1 million when they provide financials.

Loan terms are for 30 days to 72 months with annual interest rates as low as 5.49% and results can be processed in as little as one day.

Loans may be available to finance or lease equipment in many industries and can include:

  • computer equipment
  • printing machinery
  • commercial vehicles
  • auto shop equipment
  • restaurant equipment
  • medical equipment
  • construction equipment & heavy machinery
  • and other industry specific machines and tools.

Working Capital

Qualified businesses can finance up to $150,000 for 6 -18 months with annual interest rates as low as 9.99% and results can often be processed on the same day.

Working capital loans from Direct Capital could be used to purchase:

  • inventory
  • technology items
  • business related equipment
  • marketing
  • and as a temporary solution for cash flow management.

Franchise Financing

Loan terms are for 30 days to 84 months with annual interest rates that vary and results can be processed as fast as same day.

Repayment varies but deferred and seasonal payments may be available.

Offer Financing

One of the more unusual offerings from Direct Capital is support for small businesses wanting to offer financing for their own customers directly.

Offering financing allows a business to provide financing options, quick applications and results, easy promotional tools, and the ability to track results in real-time.

Final Thoughts

With Direct Capital, funds could be made available in your checking account as early as the same day as approval, and you may be able to use them for a variety of business growth activities.

Business owners who are hoping to build their business credit may find it frustrating that Direct Capital does not report to either the business or personal credit bureaus – which means borrowing from them and maintaining a good payment history will not help improve your credit score.

But that’s the price you pay for fast turnaround and easy access to funds!

More Lender Reviews

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Rissa Ann Finance Journalist
Rissa has been writing ever since she can remember. After studying writing in college, she earned her first gig with a newspaper and the rest is history. Having had done a stint finance, she found herself heavily interested in personal and business finance and has written countless pieces for the industry.
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Late Payments Hurt Your Credit Score

Please be aware that missing a payment or making a late payment can negatively impact your credit score. To protect yourself and your credit history, make sure you only accept loan terms that you can afford to repay. If you cannot make a payment on time, you should contact your lenders and lending partners immediately and discuss how to handle late payments.