Support for Corporate Restructuring and Business Succession

The SME Unit Actively Supports Initiatives for the Revitalization and Business Succession of SMEs, Utilizing Capital Loans and Other Facilities

Financing of Corporate Revitalization Loans

The SME Unit is actively engaged in providing special Corporate Revitalization Loans to support SMEs with their business revitalization, management reconstruction and business succession initiatives.

Corporate Revitalization Loans
Year FY2011 FY2012 FY2013
No. of companies 808 948 1,142
Amount (billion yen) 64.6 79.1 113.3
Subordinated Capital Loans (Recovered Loans)
Year FY2011 FY2012 FY2013
No. of companies 308 405 644
Amount (billion yen) 16.6 27.0 56.0

Cooperation with Public Revitalization Support Institutions

By the end of December 2013, Small and Medium Enterprise Revitalization Support Councils had provided revitalization planning support to 5,920 companies nationwide. The SME Unit participated in the provision of support to about one-third (1,664) of these companies (total as of December 31, 2013).

No. of revitalization planning
matters completed by Small and
Medium Enterprise
Revitalization Support Councils
(cumulative total)
No. of cases where the SME Unit of JFC
participated in the provision of support
(cumulative total)
  Support through loans
5,920 companies 1,664 companies
227 companies

Implementation of Capital Loan (Revitalization) in Cooperation with Public Revitalization Support Institution and Private Financial Institution

The Great East Japan Earthquake Recovery Special Loan

Using a capital loan (revitalization), the Nagoya Branch's SME Unit (currently the Nagoya Support Branch in the West Japan SME Support Office), provided finance to two small and medium manufacturers (group companies) which were supported by the Aichi Prefecture Small and Medium Enterprise Revitalization Support Council in the enactment of their revitalization plans.

In this case, through the implementation of revitalization support using a combination of DDS(Note) by private financial institutions, normalization of claims with amended terms, and new financing by JFC (capital loan (revitalization)), the financial strength of the company was enhanced, its cash flow was improved, and its revitalization was accelerated by the implementing of support in cooperation with a private financial institution and the Council.

Going forward, the SME Unit will continue to actively support the business revitalization of SMEs.

Note: Financial support technique that aims to eliminate insolvency by converting a part of the debt into a subordinated capital loan that can be deemed as net worth according to the inspection manual for financial institutions.

Addition of DES Feature

To enhance the support provided to SMEs engaged in revitalization, the Japan Finance Corporation Act was amended in June 2013 by the addition of a debt-for-equity swap (DES) feature.

A DES is the exchanging of a company's debt for equity. The transfer of debt to shares in a company with potential for revitalization improves the company's financial condition and promotes the revitalization of its business.

It is expected that companies capable of implementing a DES with the cooperation of private financial institutions or other parties will be the subject of the support, based on equitable procedures including the participation of Small and Medium Enterprise Revitalization Support Councils.

go to page top