Context

When you submit a buyer for financing approval through Capchase, the application may be rejected for various reasons. Understanding these reasons can help you determine whether you can take steps to get the buyer approved or pursue other options.

Rejection Causes

Buyer applications can be rejected for several reasons. Here are the most common causes and potential solutions:

Credit-Related Rejections

Common reasons for buyer disapproval include insufficient credit history, a credit score below the required threshold, or unfavorable financial indicators.

Legal and Compliance Issues

• Tax liens: Recent or active tax issues

• Inactive entity: Companies must maintain an active status in their state's business registry by paying yearly fees (in addition to taxes and other obligations). If a company's license is terminated or shows as inactive in the registry, the application cannot be approved. For example, in California, if the state registry shows that a company is registered but its license has been terminated, it cannot be funded.

• Company dissolved: Business officially closed

• Recent bankruptcy: Significant debt recently written off

• Time in business: Buyer companies must demonstrate an established operating history. The minimum required time spans from 12 to 36 months, depending on the Vendor configuration.

• Unsupported locations: Eligible countries include the United States, the United Kingdom, Finland, Spain, the Netherlands, Belgium, Canada, Sweden, Australia, and Ireland. Capchase does not operate in certain states (Nevada, North Dakota, South Dakota, and Vermont) or provinces (Quebec).

• Prohibited industries: Businesses in restricted industries such as defense/weapons, adult entertainment, tobacco, alcohol, gambling, cannabis, or controlled substances

• Federal agencies: Government agencies at the federal level are not supported

• Sole proprietors / single-employee LLCs — We can only support companies; no individuals are eligible.

Data and Verification Issues

• Incorrect legal information: The legal name or address provided doesn't match official records

• Missing information: Insufficient data available to complete the credit review

Potential Solutions

For many rejections, especially those related to thin credit profiles or low credit scores, you can appeal the decision by having the buyer provide financial documents. The Capchase team will provide a secure link for uploading:

• Recent financial statements

• Tax returns

• Bank statements

• Other relevant financial documentation

If the rejection is due to incorrect legal information, verify the buyer's exact legal name and address and resubmit the application with the correct details.

For issues such as tax liens or inactive status, the buyer will need to resolve them with the appropriate authorities before reapplying.

Contact Capchase at support@capchase.com for specific details about your rejection and guidance on next steps.