The Small and Medium Enterprises Agency (SME Agency) will implement the following financing assistance measures to absolutely ensure financing for small and medium enterprises (SMEs) in the second half of FY 2012.
1. Utilization of the Safety-net Guarantee (No. 5)
The SME Agency will continue to utilize the Safety-net Guarantee (No. 5) with a 100% guarantee coverage rate, consolidating smooth financing for SMEs (see Appendix 1(PDF:254KB) ) (in Japanese).
On January 28, 2011, the SME Agency announced that a measure in the Safety-net Guarantee (No. 5) program for which SMEs in any type of industries are entitled to apply in principle would expire by the end of March 2011. However, the SME Agency decided later to extend the measure covering all types of industries in principle as an emergency relief measure for SMEs affected by the Great East Japan Earthquake in March 2011.
Recently, the SME Agency conducted a business survey concerning the measure on SMEs and according to the results of the survey it has decided to remove businesses whose conditions were found to have improved from the measure coverage, on November 1, 2012. As a soft-landing measure, the SME Agency will apply more relaxed eligibility criteria (covering SMEs whose profits or equivalents posted in the latest month show a decline of 5% or more from the level of the year before the collapse of Lehman Brothers four years ago) than the current criteria (covering SMEs whose profits or equivalents posted in the latest month show a decline of 5% or more from the level of the previous year), which is also applied, and will provide consolidated support for SMEs belonging to industries in harsh conditions (see Appendix 2(PDF:459KB) ) (in Japanese).
In order to publicize the above matters, the current measure in the Safety-net Guarantee (No. 5) program, for which SMES in any industry are entitled to apply in principle and which was scheduled to expire at the end of September 2012, will be extended for another month, to the end of October 2012.
2. Utilization of the Great East Japan Earthquake Recovery Emergency Guarantee, Small-sized Enterprises Guarantee, and other guarantees
The SME Agency will support the financing for small-sized enterprises and other entities affected by the Great East Japan Earthquake by actively utilizing guarantee programs with a 100% guarantee coverage rate, such as the Great East Japan Earthquake Recovery Emergency Guarantee and Small-sized Enterprises Guarantee (see Appendix 3(PDF:324KB) ).*
* The Small-sized Enterprises Guarantee covers small-sized businesses whose total guarantee obligation is 12,500,000 yen or less and that employ 20 employees or less (5 employees or less for commercial and service industries).
3. Utilization of the safety-net loans
The SME Agency will provide financing assistance for SMEs whose business conditions have deteriorated due to changes in external conditions, utilizing the safety-net loans provided by the Japan Finance Corporation or other measures (see Appendix 4(PDF:290KB) ) (in Japanese).
4. Creation of the Business Capabilities Enhancement Guarantee Program (measure for strengthening SMEs' structures)
The SME Agency will create a new guarantee program (Business Capabilities Enhancement Guarantee Program) in October 2012, in which guarantee charges for SMEs would be reduced or abolished when SMEs strive to improve their business conditions while receiving support from external experts, such as financial institutions or tax accountants. Through this program, the SME Agency will strongly support SMEs' financial conditions as well as their actions for improving business conditions (see Appendix 5(PDF:205KB) ) (in Japanese).
- Appendix 1:Overview of the Safety-net Guarantee (No. 5)(PDF:254KB) (in Japanese)
- Appendix 2:Industries that are entitled to apply to the Safety-net Guarantee (No. 5) (from November 1, 2012, to March 31, 2013)(PDF:459KB) (in Japanese)
- Appendix 3:Overview of the Great East Japan Earthquake Recovery Emergency Guarantee(PDF:324KB)
- Appendix 4:Overview of the Safety-net Loans(PDF:290KB) (in Japanese)
- Appendix 5:Overview of the Business Capabilities Enhancement Guarantee(PDF:205KB) (in Japanese)
August 31, 2012
Division in Charge
Finance Division, Business Environment Department, Small and Medium Enterprise Agency