The Development Bank of Japan said Tuesday it has launched a special lending mechanism to help midsize companies implement drastic operational reforms as part of the government's policy to reinvigorate the economy.
Midsize companies with around 100 million yen to 1 billion yen in capital will be able to borrow long-term funds without many restrictions, provided their restructuring plans are viable and their liabilities have yet to exceed assets, the state lender said.
To qualify, private financial institutions must agree to support a company's reforms in syndicates with the DBJ, it said, adding the public lending must also be capped at 30 percent.
Loans under the three-year mechanism expiring at the end of fiscal 2004 can be used for any reform purposes, including the repayment of interest-bearing debts, operating capital and facility investment.
Loan interest rates will be set on the basis of the credibility each firm hopes to attain upon completing restructuring plans.