What is Direct Lender?

A direct lender is a bank, credit union or finance company that funds loans with its own capital and makes the credit decision itself. Working directly with a lender means dealing with one set of criteria and products. By contrast, a broker or marketplace connects you with multiple lenders. Some direct lenders also accept applications through brokers. Neither path is inherently better; the right choice depends on how many options you want to compare and how much time you have.

Example

A business applies for a line of credit at its own bank, which reviews and funds the line directly.

Related terms

Debt Service Coverage Ratio (DSCR)Draw PeriodEIN (Employer Identification Number)All terms