Due to the prolonged impact of the new coronavirus, it remains difficult for many small and medium-sized enterprises to expect a recovery in sales even in the new fiscal year.
In some cases, the repayment of the principal of the loan borrowed as working capital started last year, and some managers are worried.
Hiroshi Nagamori (74) from Asakusa, Tokyo, is the fifth president of a festival goods store that has been in business since the 3rd year of the Meiji era, more than 50 years ago.
Our original products, such as the indigo-dyed "Hanten," were very popular not only with people involved in local festivals but also with foreign tourists.
However, due to the influence of the new coronavirus, sales to foreign tourists, which accounted for 40% of the total, have almost disappeared.
The festivals have been canceled one after another, and the notebooks that record orders from customers are often blank.
There was still a lot of winter outfits in stock in the warehouse near the store.
In July last year, Mr. Nagamori received a virtually interest-free and unsecured loan from a credit union as a fund to pay for utilities and taxes.
We do not expect the effects of the new coronavirus to last so long, so we have set a deferred period of one year for principal repayment.
However, sales are still less than half of what they were before the spread of the infection, and with no recovery expected in the new year, repayments will begin three months later.
The burden of maintaining a store's operations is not small.
Mr. Nagamori said, "Until it was said that the initial prospects were unsatisfactory, I did not expect the influence of Corona to last for more than a year. If sales do not come in, repayment will be quite difficult. When that happens, I'll be sad if I can see the "exit". "
Deferment period "within 1 year" is the majority
According to the SME Agency, among SMEs and sole proprietors who have decided to receive virtually interest-free and unsecured loans by the end of January, the deferred period for principal repayment has been set within one year. This means that 66% of government-affiliated financial institutions, Japan Finance Corporation, and 57% of private financial institutions.
The loan was started by a government-affiliated financial institution in March last year and by a private financial institution in May last year.
Since many companies are expected to start repayment of their principal in the new fiscal year, the Financial Services Agency requires each financial institution to flexibly respond to customer requests, such as postponing the repayment start time.
The Small and Medium Enterprise Agency has also set up a "business restructuring subsidy" to support small and medium-sized enterprises working on new businesses and business format conversions, and plans to start accepting applications from April 15.
Shinkin banks support business partners
Community-based credit unions are focusing on supporting small and medium-sized enterprises that have increased their debt.
At The Yokohama Shinkin Bank in Yokohama City, about 70% of the business partners who received virtually interest-free and unsecured loans set a deferred period of principal repayment of one year.
In March, which is the end of the fiscal year, in order to postpone the repayment, the number of applications for "refinancing", in which the debt is once returned and the amount is newly borrowed, has increased sharply.
We support cash flow by responding as flexibly as possible, including changing conditions such as extending the repayment deadline.
On the 30th, a Shinkin bank sales representative visited a company that manufactures and sells tableware.
The company refinanced through Shinkin banks last month due to sluggish sales of tableware for eating out, partly due to the state of emergency issued in one of the three prefectures in the Tokyo metropolitan area.
We anticipate that orders will increase toward the end of the year, and we are considering receiving additional loans to secure the necessary funds for purchasing.
The company's president, Nyoyu Waka, said, "I think I can manage to overcome the crisis. I am grateful for the strong support."
Atsushi Noda, director of the Yokohama Shinkin Bank's loan department, said, "I think it is the role of the Shinkin Bank to solve problems together, not just with the money paid. I want to sweat and live together in the community. "