JBA released the results of its survey on loans that are not excessively dependent on personal guarantees on July 13.
The government established the “Committee on the Promotion of Society with Various Opportunities” in the Cabinet and is deliberating on measures to support re-challenges. Financial institutions are required to diversify loan methods that are not excessively dependent on personal guarantees. The survey was conducted to find how banks are tackling this issue.
The survey asked banks about five items regarding loans extended to small and medium-sized companies as defined in the Medium and Small Enterprise Basic Law, that is, (1) loans with movable property or claim transfers as collateral (including ABLs), (2) loans backed by intellectual property, (3) loans utilizing covenants, (4) loans utilizing a scoring model, and (5) other specific cases.
The survey revealed that the total outstanding balance of (1) through (4) was 8,437,637 million yen, and 13 specific cases were reported under (5).