6. Finance Related Measures

1. SBIR
(Small Business
Innovation Research)

2. SME/Venture
Business Support
Center

3. Entrepreneurship
Workshop

4. Start-Up Loan
Program

5. Dissemination
of Managerial
Improvement
Know-how

6. Finance related
measures

Contents Top > 6.Finance Related Measures > Arrangement for Guaranteed Trade-Receivable-Backed Loans >

6	Finance Related MeasuresArrangement for Guaranteed Trade-Receivable-Backed Loans

Outline of the measure

Example 1: Case where offering goods accounts receivable as collateral subject company could fund an amount equivalent to what would have been possible against property security.

Example 2: Case where under this system subject company funded working capital while it would fund capital investment against property security.

Example 3: Case where subject company utilized long-term receivables as collateral and increased liquidity on hand, which resulted in a improved profit rate.

Example 4: Case where subject company could change the “maximal collateral” method in effect at the time of application to that of “case-specific collateral” in accordance with each transaction.

Example 5: Case where subject company utilizes this system by the maximal collateral method to further expand business through quick and flexible purchasing.

Example 6: Case where subject company utilized this system seeking to stop financial dependence upon parent company.

Example 7: Case where subject company used as collateral accounts receivable that were growing with sales growth, and funded additional working capital requirement that was increasing in line with business expansion.

Example 8: Case where subject company funded capital required for developing new customers by utilizing this system.

Example 9: Case where despite a clause prohibiting assignment of receivables subject company obtained consent of the client to nullifying the clause for utilizing this system.

Example 10: Case where by borrowing against receivable offered as collateral subject company improved buying terms through change of the method of payment to suppliers from trade notes to cash payment.

< Example 1 >
Case where offering good accounts receivable as collateral subject company could fund an amount equivalent to what would have been possible against property security.

(1) Borrower company

(1)	Company name: A Company
(2)	Capitalization: 20 million yen
(3)	Employees: 25
(4)	Line of business: machinery plant construction
(5)	Annual sales: 900 million yen
(6)	Borrowed amount: Case-specific collateral for 2 million yen

(2) Third party debtor(debtor client)

Manufacturer of agricultural- pharmaceutical intermediates(listed on OSE 2nd section)

(3) Perfection

Accepted

(4) Outline of business

A company engages in a business that performs principally plant construction ordered by local chemical product manufacturers. In recent years Company has been in the red because of declining revenue resulting from fallen unit prices on plant construction; however, for the current term, Company expects to get back in the black as it has secured a big order.

(5) How this system was utilized

To execute the big order received from a client, Company needed to finance for outsourcing and materials; however, Company was unable to raise additional fund because it had no property available as collateral.

Company consulted with its financial institution, who explained that against collateralized accounts receivable funding would be possible under this system. Then, Company talked to the client listed on the OSE 2nd section (who expects to omit dividend for the current term) and obtained its "no-objection" reply. Consequently, Company could borrow up to 70% of the collateralized accounts receivable.

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