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 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.

(1) Borrower company

(1)	Company name: J company
(2)	Capitalization: 10 million yen
(3)	Employees: 25
(4)	Line of business: advertising agency
(5)	Annual sales: 700 million yen
(6)	Borrowed amount: Maximal collateral for 20 million yen

(2) Third party debtor(debtor client)

Advertising agency

(3) Perfection

Registration(retention of notification)

(4) Outline of business

J company was set up in 1989 to engage in planning, production and dispatch of direct mail. Company deals with lots of clients and enjoys stable sales. In recent years, however, smaller orders and price reduction have caused profit growth to stay flat. Therefore, Company seeks to reinforce sales force, which is its strength, and push the freshness of its planning capabilities to the front, thereby giving a significant leap forward.

(5) How this system was utilized

With no more property available as collateral Company was having difficulty in further financing. However, Company could obtain more fund under this system, and therefore, changed the method of payment to suppliers from traditional trade notes to cash payment. This improvement in buying terms led to reduction of purchase cost.

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