Rejected by Capify? Why a long trading history isn't always enough

It stings in a particular way when you’ve run the same shop for a decade or more and still get a no. You’ve survived recessions, a pandemic and the arrival of online shopping. Then one rough season and the answer is “unable to assist”. If Capify rejected your application, here’s what’s likely going on and how to get moving again.

Capify at a glance

Capify was one of the earlier alternative lenders to Australian small businesses, offering unsecured finance at a time when the banks were the main game. As with other unsecured lenders, the business’s own trading is what the decision rests on.

Why recent months can outweigh a long history

The points below describe unsecured lending generally. They don’t describe Capify’s specific reasons for your outcome.

The next repayment comes from next month. An unsecured lender has nothing to fall back on but your trading. So the most recent months, which best predict the next ones, usually carry the most weight.

Local shocks hit shops hard. Roadworks, a closed anchor tenant, a new competitor or a parking change can knock foot traffic for months. The business is fine, but the statements don’t look it.

Card takings move with the weather and the calendar. A wet winter or a long gap between school holidays shows up immediately.

Older debts linger. A short-term loan taken in a bad year might still be debiting the account.

The credit file remembers. A default from a rough patch stays on a credit report for years. The OAIC explains how long information stays.

What to do over the next 24 hours

• Ask Capify what weighed most. Recent turnover, existing repayments, credit history? You’ll want to know.
• Write down what’s genuinely temporary. Roadworks finishing in March, a new tenant moving in, a peak season ahead. That’s the story of your exit.
• Line up the urgent bill. Who needs paying, how much, by when.
• Resist the next three applications. If the last few months are the problem, they’ll be the problem everywhere that uses the same measure.
• Look at the property. Do you own the shop, your home or an investment property? That’s what we lend against.

Leaning on the asset instead of the season

We lend between $20,000 and $50,000 on the strength of a home, investment property or commercial building, going as high as 80% of a residential property’s value or 70% of a commercial one. There’s no valuation, and no bank statements, financial statements or tax returns are needed. Bad credit, defaults and ATO debt are considered.

For an established retailer with a temporary dip, that’s often the cleanest fix. The property hasn’t had a bad quarter. We look at it, what’s owed against it, what the money is for, and how you’ll repay: when trade picks up, at the sale of the business, or by refinancing. Up to three months of interest can be prepaid to give you breathing space, then repayments are weekly. Funding can happen in as little as 24 hours once approved.

If several older short-term loans are part of the squeeze, our page on refinancing business debt is worth a read.

Example: a Hobart gift shop

A gift and homewares shop in Hobart has traded for 14 years. Eight months of streetscape works out the front cut foot traffic, a supplier wants $28,000 before releasing Christmas stock, and the owner has an older online loan still taking a weekly debit. An unsecured application is declined.

The owner’s home in Sandy Bay has strong equity. A $35,000 loan against it pays the supplier and clears the older debit, the works finish before December, and Christmas trade gives the repayments a home. The roadworks never enter the assessment. This is an illustrative example.

Is a secured loan the right call?

If the dip is permanent, not temporary, borrowing more may only delay a harder decision, and a talk with your accountant should come first. If the shop is sound and the problem has an end date, using property to bridge it is a sensible, short move. Our retail page covers how lenders view shops more broadly.

Get past the rough patch

If Capify said no and the bill hasn’t gone away, give us the short version. The form is quick, around a minute, and simply asking never triggers a credit check, so nothing lands on your file. You deal directly with the lender, so your details aren’t handed around and you won’t be chased by a string of callers. One of our lending team reads it and phones you. Be accurate about the property and what’s owed so we can help you properly the first time. See if you qualify →