Direct Capital Review

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Phone Number
Date Established
Portsmouth, NH


  • Low factor rates
  • Good public reputation


  • Opaque terms and fees
  • Stringent borrower qualifications


Direct Capital is a New Hampshire-based online funder serving small businesses. The company offers three categories of financing: working capital, equipment financing, and franchise financing. This review will focus on Direct Capital’s working capital line.

Direct Capital makes a much better first impression than most online funders, with both better short-term loan (STL) rates and transparency than many of its competitors. This does come at a small tradeoff, though: companies with really poor credit might not qualify for financing.

We generally recommend businesses do some comparison shopping before committing to short-term funding.

Services Offered

Direct Capital offers:

Borrower Qualifications

These are the minimum qualifications for getting working capital from Direct:

Time in business:Unknown
Credit score:680

Terms and Fees

Here are the terms and fees for Direct’s STLs:

Borrowing amount:$$10K – $150K
Term length: 6 – 18 months
Factor rate:9.99% – 18% of the borrowing amount
Origination fee:Unknown
Effective APR: Learn more

Like most short-term funders, Direct uses factor rates rather than interest rates to calculate its loans. So if you were to borrow $10,000 at 9.99%, you would have to pay back $10,999 ($10,000 x 0.0999 + $10,000). Another way to look at it: for every $1 you borrow, you’ll have to repay between $1.09 and $1.18. This does not include any origination fees Direct may charge. Typically those range between 1% – 4% of the amount you borrow.

If you’ve never taken out an STL before, the repayment method might come as a bit of a surprise. Rather than send Direct a monthly check, you’ll be making daily payments. These payments are debited from your business account via automated clearing house (ACH).

Note that a counterintuitive feature of flat fees is that your interest is front-loaded into your loan, which means you’ll have a higher effective APR the more quickly you pay your loan off. Keep in mind, however, that many funders will factor term length into their flat fees so that longer term lengths tend to carry higher flat fees.

Application Process

You can begin the application process online or over the phone.

Completing an STL application usually involves providing some corroborating documents such as bank statements, so if you want to expedite the process, you may want to have them handy. If all goes well, you can get same day funding.

Sales and Advertising Transparency

Direct Capital’s website is better than that of most short-term funders, offering most of the key statistics you need. The caveat is that the site doesn’t give complete ranges for all their products: the loan calculator on the front page assumes you’re receiving the best rates Direct offers, for example.

Customer Service and 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.

Negative Reviews and Complaints

Direct Capital has an A+ rating with the BBB, but has received 20 complaints over the last three years, most of which involved problems with the product or service or billings issues. General criticisms include:

  • Unclear terms: Many of the complaints revolved around unexpected fees or terms.
  • Billing logistics: One customer said the automated billing continued after the completion of their loan.
  • Difficulty reaching customer service: Some customers complained they had a hard time reaching relevant staff.

Positive Reviews and Testimonials

Direct Capital gets a 9.2 out of 10 on Trustpilot (based on 43 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.

Final Verdict

Direct Capital’s working capital product stands out from that of many of its competitors by offering not-too-unreasonable rates quickly. The company is also more transparent than the average online funder, which is usually a good sign. On the other hand, there are a fairly high number of complaints on BBB (though Direct seemed to take initiative in addressing them).

As always, approach even the better online funders with caution. If you want to see what else is available, check out our comparison charts of merchant cash advances and small business loans for alternatives.

Chris Motola

Chris Motola

Chris Motola is an independent writer, journalist, programmer, and game designer who has mastered the art of using his laptop in no fewer than 541 positions, most of them unergonomic. When he's not pushing keys or swiping screens, he's probably out exploring urban or natural environs, experimenting in the kitchen, or delighting/annoying his friends with his ideas and theories.
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