< Outline of the measure>
Arrangement for Guaranteed Trade-Receivable-Backed Loans |
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| This system opens a new way of financing for small and medium enterprises that does not depend upon collateral on property. |
 Who is eligible |
Small/medium business owners (individuals, corporations, associations, etc. that run business)
A wide range of industries and sectors, with a few exceptions, will be eligible (in the same range that applies to users of ordinary credit guarantee system). |
| Terms of support |
 This is a system under which debt guarantee will be provided by Credit Guarantee Corporation on loans granted by financial institutions against collateralized accounts receivable held by small/medium business owners (accounts receivable, installments receivable, transportation charges receivable, medical treatment fees receivable, contract work accounts receivable, etc.).
Borrowing will become possible upon completion of product delivery or rendering of service (in a state where receivables are accrued). To a certain extent, borrowing will also become possible upon signing of the relevant agreement.
< Upper limit of guarantee, ratio of guarantee>
Upper limit of guarantee: 100 million yen
Ratio of guarantee: 90%
Consequently, the upper limit of a loan available from a financial institution shall be 110 million yen.
< Rate of guarantee fee>
0.85% p.a.
< Security conditions>
* Only the receivables held by the applicant shall be collateralized. No guarantor will be required other than the representative of the applicant corporation. (Please note, however, that the 10% portion on which risk is taken by relevant financial institutions will be subject to different terms. Please consult with your financial institution.)
* To be protestable against a third party, assignment of collateralized receivables shall be subject to any of the following: (1) registration under Receivables Assignment Registration System; (2) notification to the debtor of the receivables; and (3) approval of the debtor of the receivables.
< Guarantee period>
Under maximal collateral method: 1 year
Under case-specific method: up to1 year (inclusive) |
| [One case of guarantee utilized] |
| As receivables are collectible only in cash, there is no way to cash receivables, for instance by discounting trade notes, until they become due and payable. This system enabled receivables to be cashed earlier, increased liquidity on hand and enabled the period for payment to supplier to be shortened. Consequently unit prices on purchase were reduced and the profit rate improved. |
