CIT Direct Capital Equipment Financing Review
- Reasonable interest rates
- Stringent borrower qualifications
CIT Direct Capital Equipment Financing Overview
CIT Direct Capital is a New Hampshire-based online funder serving small businesses; it is a division of New Jersey-based CIT Bank. The company offers three categories of financing: working capital, equipment financing, and franchise financing. This review will focus on CIT Direct Capital’s equipment financing line. Read our review of Direct Capital’s working capital products for more information about those services.
Direct’s equipment financing operation functions in a more traditional capacity than its short-term funding division does, with monthly payments and leasing agreements. Three financing options allow customers to choose between agreements designed to foster either ownership or eventual equipment returns.
Read on for more details, or consider these equipment financing alternatives.
Table of Contents
Direct Capital offers:
- Short-term loans
- Equipment Financing
- Franchise financing
Types of Equipment Covered
- Computer hardware
- POS Terminals
- Commercial vehicles
- Capital equipment
Here are the prerequisites for getting financing from CIT Direct Capital:
|Time in business:||2 years|
|Revenue:||$100,000 per month|
Terms & Fees
Here are the terms and fees for Direct’s equipment financing:
|Amount:||Up to $500,000|
|Term length:||6 – 72 months|
|Interest rate:||Starts at 5.49%|
|Buyout agreement:||$1 Buyout;
Fair Market Value;
|Additional costs:||Shipping & handling (if applicable)|
|Effective APR:||Learn more|
Direct offers three kinds of leasing, making it (at least potentially) a versatile option for financing equipment.
If you’re not sure whether you want to own the equipment and would rather just use it for the duration of your lease, you might find a Fair Market Value (FMV) lease to be the most appropriate for your business. FMV leases tend to have lower monthly payments as the full cost of the equipment isn’t figured into your contract. Rather, at the end of your term length, you can decide whether you want to return the equipment or buy it at “fair market value.”
The other two types of leases are meant to facilitate buying. A $1 buyout lease usually breaks the full cost of the product up over the term of the lease. In that sense, it functions almost more like a loan, although it still is technically a lease. At the end of the term, you formally buy the equipment from Direct Capital for $1.
Net terms, like the $1 buyout, are an option for companies looking to own the equipment over the long term. These leases have much shorter term lengths, usually between one and three months, and function as a kind of deferred payment for the item. While the lessor (Direct Capital) will technically own the product during the term, the lessee is responsible for all maintenance and costs associated with the item.
The rate you’re offered will depend on both the type of agreement you enter into and your credit rating. Typically, Direct Capital prefers to work with entities that have been in business for at least two years. Payments are made monthly, with seasonal deferments available for some lessees.
Sales & Advertising Transparency
Direct Capital’s website is better than those of many of its competitors, offering most of the key statistics you need. That’s not to say that Direct offers a complete picture, however. The information presented is best-case-scenario, on the rosier side of what you’re likely to get; the rates you’re offered will probably be higher unless you have great credit.
Customer Service & Technical Support
Direct Capital’s staff was helpful and responsive to my inquiries with almost no gratuitous sales pressure.
Most customers who left user reviews were also happy with the service they received.
You can reach customer service by phone, through the company website or on social media at Facebook, Twitter, or LinkedIn.
Negative Reviews & Complaints
Direct Capital has a D- rating with the BBB because it has failed to respond to customer complaints. The company has received 92 complaints over the last three years, most of which involved problems with the product or billing issues. General criticisms include:
- Unclear Terms: Many of the complaints were about customers encountering unexpected fees or terms.
- Billing Logistics: One customer said that automated billing continued after the completion of the loan.
- Difficulty Reaching Customer Service: Some customers complained they had a hard time reaching relevant staff.
Positive Reviews & Testimonials
Direct Capital rates an 9.2 out of 10 on Trustpilot (based on 174 reviews). Customers liked Direct Capital’s:
- Customer Service: Many users were satisfied with customer service, calling it prompt and pleasant to deal with.
- Speed: Customers appreciated how quickly they received their funds.
- Flexibility: A lot of customers liked the breadth of Direct Capital’s services.
Direct Capital’s equipment financing products provide customers with options, whether they’re looking to own the product or return it at the end of their term. Most major types of equipment are also covered. The funder’s rates aren’t terrible either, which is always a plus. However, their qualifications are nearly as stringent as those of traditional banks
The only major spot of concern is in the fairly high number of complaints about the company filed with the BBB. These haven’t been enough to lower its rating with the organization, but they do warrant some consideration.
Don’t qualify for equipment financing from Direct Capital? You still have options. Check out our top alternative equipment financers for some ideas.