Malicious “factoring” demands a high commission Consultation surge April 18, 18:23
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As the cash flow of small and medium-sized enterprises becomes severe due to the spread of the new coronavirus infection, companies that use financial services called `` factoring '' to cash working accounts receivable from customers and raise immediate working capital Soaring. However, some factoring companies charge a high commission, equivalent to several hundred percent when converted to annual interest rates, and experts say that in the gray zone of the law, a malicious company that is virtually the same as Yami Finance Many countries need to provide appropriate operational guidelines. "
"Factoring" is a financial service that enables small and medium-sized companies to receive cash from the face value of receivables instead of transferring receivables to traders, instead of transferring the receivables to suppliers.
As the financing of SMEs has become more severe due to the spread of the new coronavirus, more and more financial companies have started factoring services.Of these, major credit guarantee companies in Minato-ku, Tokyo, started services last month. Are flooded with applications for immediate working capital, and the number of applications in the past month has risen to about 80.
Factoring, on the other hand, is not subject to regulations such as the Money Lending Business Law or the Interest Restriction Law, as it is not a loan or loan of money due to "transfer of receivables" under contract.
For this reason, it is possible to enter without registering for money lending, etc., and there are a number of posts on the SNS that solicit solicitations such as "cash receivables on the same day".
However, many firms charge a high fee of several hundred percent, which is much higher than the upper limit of the law when converted to annual interest, and it has been said that lawyer offices in Tokyo have received more than 30 consultations since the middle of last month .
Inoue Yuki, who is familiar with the factoring problem, said, `` In the gray zone of the law, there are many malicious companies who take very high commissions that are virtually the same as Yami Finance, but due to the spread of the new coronavirus, An increasing number of companies have to rely on these companies, and the state needs to provide the proper operational guidelines for factoring companies. "
How factoring works
Since there is a time lag between when the SME delivers the product to the customer and when the payment is actually paid, by transferring the accounts receivable to a factoring company, the company can make the working capital faster than usual. It is a mechanism that you can get.
On the other hand, if the factoring company collects the accounts receivable from customers, the profits will be the fee deducted from the SMEs.
However, if the transfer of accounts receivable is known to the business partner, etc., it will be related to the trust of the company, and the SMEs will take over the collection of claims that the factoring company should originally perform, and in fact only the trader and the company A method called "two-way factoring" for exchanging funds through the Internet is also expanding.
There are a number of businesses that charge hundreds of percent of commissions, which, when converted to annual interest rates, far exceed the limit of the law, but factoring requires that contracts be loaned and lent by lending. As a rule, it is not subject to regulations such as the Money Lending Business Law and the Interest Restriction Law.
Regarding the rapid increase in SMEs using factoring, Hideo Takagi, Vice Chairman of the Japan Business Finance Association, which is made up of financiers, said, `` By the time the guaranteed loan, which is an emergency measure of the government, is actually executed. , It takes about two months from the time of application, so if you don't have immediate funding, SMEs won't have the cash flow. "
"Two-party factoring is essentially a high-interest loan secured by receivables receivable, which is the same as Yami Finance, but the factoring is not regulated by law, and the former Yami gold traders can trade in large companies. Has become. "
Constructor: "I can't change my belly on my back"
The construction company in the Kanto region, which raised working capital in "Factoring", was stuck in financing due to the new coronavirus since February, all planned multiple projects were canceled or postponed. about it.
For this reason, he tried to obtain a loan from a government-affiliated financial institution, but was unable to pass the examination, so he said he had to use a factoring company.
The contractor cashed the accounts receivable with a face value of approximately 8.5 million yen by factoring and was able to secure the working capital for the time being, but a commission of 20% of the receivables, approximately 1.5 million yen, was deducted, The cash actually received was 7 million yen.
Converting commissions to annual interest is 240%, but he said he had to rely on factoring to continue the business.
In addition, the collection of accounts receivable was not a factoring contractor, but a contract called "two-way factoring" that was performed on behalf of the contractor.
However, due to the deterioration of the business conditions of the business partners, it was not possible to collect the receivables by the due date, and it is now in a bicycle operation that factors in additional receivables and raises funds.
The contractor said, "I couldn't get a loan from a financial institution and I couldn't help crushing the company, so I ended up with the factoring to get the quickest financing. But I couldn't help but think about the employees. For business continuity, I had to rely on factoring. It is about to reach its limit. "
Applications flooded due to new coronavirus
A major credit guarantee company, eGuarantee, located in Minato-ku, Tokyo, launched a new "factoring" service last month to support small and medium-sized businesses whose cash has been severely affected by the new coronavirus.
The company limits the factoring "fees" to 0.5% of accounts receivable, which translates to an annual interest rate of 6%.
However, even if the commission is relatively low, cashing of receivables receivables is a risk of "earnings of profits", so factoring is not actively recommended to companies as a last resort. is.
However, as soon as the service started, applications from small and medium-sized businesses seeking immediate working capital were flooded, and the number of applications in the past month has risen to about 80.
`` I thought I could do something for small and medium-sized businesses suffering from the spread of the new coronavirus and started factoring service, but basically interest rates are also charged, First, I'll guide you through the steps you need to take.Some companies take hundreds of percent of annualized fees, but once you jump, you will not be able to get out and it will not be useful for companies "
Consult a lawyer office one after another
The lawyer's office in Chuo-ku, Tokyo, has received over 30 consultations from small and medium-sized companies on factoring since the middle of last month.
On the SNS, factoring companies have posted a series of posts, such as "Cashing cash worsening on corona cash flow", "Realizing cash flow on the same day as soon as possible", and "Undergoing examinations!"
However, small and medium-sized enterprises say, "We have seen the current situation of the business situation and have taken a high commission." Or "We have a contract to collect accounts receivable itself, but we cannot collect the receivables by the due date. , And it is in a state of cycling to raise more funding through factoring. "
Yuki Inoue, a lawyer at Tokyo Ekimae Law Office, who is familiar with factoring issues, said, "From mid-March to late March, consultations have increased sharply. In some cases, if the contract is well-formed, a new gray zone may have been established without being subject to the regulations of the Money Lending Business Law, the Interest Restriction Law, and the Investment Law. '' Talking
He added, "Using factoring may improve temporary cash flow, but it can quickly cause a decline in cash flow. However, an increasing number of companies have to rely on these companies. In fact, the state needs to provide good operating guidelines for factoring companies. "