Purpose In examining an economic fluctuation, researchers often refer to the theories of impaired access to capital which mostly explain, from the perspective of bank lending supplies, a shock in firm’s access to investment would decrease its capital expenditures and net debt issuance during crisis period. However, some studies show that this is not always the case. A demand shock theory can explain the decrease in firm’s capital expenditures and net debt issuance during crisis period, but there should be no causal link between the two. This is because firms naturally do not invest during crisis period because of a decrease in investment wealth during crisis period. This paper aims to examine these theories with respect to the Covid-19 crisis in Indonesia. Design/methodology/approach The change in firms’ capital expenditure and net debt issuance is analyzed using a non-parametric difference-in-difference and matching estimator across four firm-dimensions to see whether the implications of the supply shock theory apply to the current crisis or if that firms naturally do not invest during the crisis. In addition, this paper provides the result of panel regression to confirm the causal link between firms’ investment funds and capital expenditure, with an addition of consumer confidence index to accommodate the implications of the demand shock theory. Findings The results of this paper show that the implications of the supply shock theory cannot explain the economic fluctuation during the Covid-19 crisis. Rather, the results suggest that firms naturally do not want to invest during the crisis and that the demand shock can better explain the economic fluctuation during the Covid-19 crisis. This is confirmed by the result of panel regression which shows that only consumer confidence index has a significant positive relationship with firms’ capital expenditure. Originality/value This is the first study to examine the theory of impaired access to capital with respect to the Covid-19 crisis in Indonesia.