The government has submitted a bill to the Diet to help small and midsize enterprises overcome cash-flow problems. An increasing number of enterprises earning operating profits are going bankrupt after being pressed by lenders to repay loans. It is hoped that this bill will help such companies avoid having to file for bankruptcy.
The idea for the bill at first caused some controversy as Financial Services Minister Shizuka Kamei had called for a "moratorium" on repayments of loans. The bill's wording has been softened, avoiding the word "moratorium." If the bill becomes law, it will be in force through the end of March 2011.
The bill covers small and midsize enterprises — with no more than 300 employees or ¥300 million in capital in the case of manufacturers — that have been pushed into a corner by the current financial crisis and economic downturn. The companies will have to be judged capable of turning themselves around if the economic environment improves within two to three years. The bill also covers people who took out housing loans.