The Japan Finance Corporation explains the application procedure and necessary documents for those planning to start a business and those who have only recently started one. The documents required change with the application method (internet or post) and the type of loan. Following the guidance the Corporation publishes, this article sets out general examples of documents to prepare. The result of the assessment is decided by the applicant's circumstances, and the Corporation may not be able to meet the applicant's wishes.When you start a new job, there is a way to borrow money from a government financial institution. When you borrow, you hand in a document explaining "what work you will do and how you will repay", a document confirming you are who you say you are, and so on. Whether you can borrow is decided by a check called an assessment. The documents to prepare change with the way of applying and the type of loan, so before you apply, check on the official website.
Things to have ready before applying (general examples)
○Applies: Start-up plan (if planning to start or just started)
○Applies: Quotation for equipment (for equipment funds)
○Applies: Copy of the passbook of the receiving account
○Applies: The latest set of final tax return documents (if filed)
○Applies: Identity verification documents and license or permit (for businesses that need them)
The flow until you borrow money
1. PrepareGather the plan, the identity documents and so on
2. ApplyApply by internet or post
3. AssessmentHave it checked whether it is all right to lend
When you take out a loan for your business, the financial institution judges the outlook for repayment comprehensively from the numbers in the financial statements and the substance of the business. Public arrangements include the systems guaranteed by credit guarantee associations, loans from the Japan Finance Corporation, and the "Guidelines on guarantees by business owners", which encourage lending that does not rely on the owner's personal guarantee. This article sets out basic knowledge useful in preparing for a loan, following government guidance. The result of an individual assessment differs by financial institution and by case.When a company borrows money from a bank, the bank checks "whether it will be repaid properly" using a report card called the financial statements and the outlook for the work ahead. There are also arrangements such as the "credit guarantee association", which pays in place of the borrower if the borrower cannot repay, and the "Japan Finance Corporation", which handles the government's money. If you know before borrowing what will be looked at, it is easier to prepare.
Read more →Small and Medium Enterprise AgencyBusiness guide
In assessing a loan, a financial institution checks the numbers in the financial statements and asks the owner about the background. To make financing easier to obtain, the basic approach is not to make the numbers look good but to put numbers that are true to the facts into a form you can explain logically. The Guidelines on guarantees by business owners also cite clearly separating the assets and accounting of the corporation from those of the owner personally, and disclosing financial information in a timely way, as preconditions for lending that does not rely on guarantees. This article sets out general points to look at when preparing financial statements.Financial statements are documents that sum up a company's results for a year and the state of its money, and a bank looks at them when it considers whether to lend. What matters is not making the numbers look good but putting the truth into a form you can explain properly. Preparations such as separating the company's money from the president's personal money and sorting out loans and borrowings whose purpose is unclear are useful. Fudging the numbers must never be done.
Read more →Small and Medium Enterprise AgencyBusiness guide
When cash flow becomes tight, the first things that matter are to make visible in numbers when and how much will run short, and to consult early. Public support includes the cash flow consultation desks that the Small and Medium Enterprise Agency lists, Yorozu Support Centers (free management consultation), the Safety Net Guarantee of the credit guarantee associations, and the national tax deferment systems for when taxes cannot be paid in one sum. Following government guidance, this article sets out the general order of action. Responses change with individual circumstances, so consult a professional or a desk at an early stage.In a shop or a company, even when there are sales, the time money comes in and the time it is paid out can be out of step, and money can run short for a while. When this looks likely, it is important to make a table early of "when and how much will run short" and check it. After that, if you talk to the consultation desks of the government and public organizations, they can tell you about ways to borrow money and ways to discuss the time of payment. Do not worry alone; it is important to consult early.
Read more →Small and Medium Enterprise AgencyBusiness guide
With cash flow, you have more options if you make it hard to break through daily management than if you deal with it only after it becomes tight. The Small and Medium Enterprise Agency's guide to using accounting sets out, as efforts to stabilize cash flow, recording cash and deposit movements, managing accounts receivable (claims) and accounts payable (debts), keeping track of inventory, and a cash flow table. This article sets out the main points as a general explanation.In a shop or a company, even when there are sales, the day money comes in and the day it is paid out can be out of step, and money can run short for a while. To keep that from happening, it is important to record money in and out every day and to check the money that has not come in yet and the money that has not been paid yet. Knowing your stock of goods and not holding too much of it also helps. If you make a table of the outlook ahead, you can find early the times when money is likely to run short.
When national taxes cannot be paid in one sum by the due date, a deferment of payment may be granted on application to the tax office if certain requirements are met. The National Tax Agency explains the "deferment of realization", which holds off the seizure and sale of assets, and the "deferment of tax payment", which is based on grounds such as disaster, illness, closure of a business or a significant loss. Even when a deferment is granted, the treatment of delinquent tax (the charge corresponding to interest) is involved, so it is recommended to consult the collection section of the tax office with jurisdiction before the due date approaches.The rule is to pay tax by a set day, but when you are ill, there is a disaster, or your shop is struggling, you may not be able to pay all of it right away. For such times, if you tell the tax office, there is a system that lets you wait on the time of payment or pay in parts. Even while you are waiting, the tax charged for the late part keeps growing, so once you know you cannot pay, it is important to consult the tax office early.
When you start a business, whether to stay a sole proprietorship or become a corporation (a stock company, a limited liability company and so on) affects both how much money stays in your hands and the burden of procedures. Income from a sole proprietorship is subject to income tax (progressive, 5 to 45%) plus resident tax and individual business tax, while a corporation's profit is subject to corporation tax and related taxes. Becoming a corporation requires enrolment in social insurance (health insurance and employees' pension), and the officer's remuneration can use the employment income deduction. Which is better depends on the level of profit and the family situation, so comparing the numbers is the starting point.When you start a shop or a job, you can choose between a "sole proprietorship", done in your own name alone, and a "corporation", where you make a company. The taxes and insurance systems differ, so both the money left in your hands and how hard the procedures are will change. It is said that staying an individual is easier while the profit is small, and a company is often more advantageous once the profit grows, but this also changes with the number of people in your family and where you live. First, it is important to compare using numbers.
A stock company (kabushiki kaisha) comes into being when the articles of incorporation are drawn up and certified at a notary office, the capital is paid in, and an application for registration of incorporation is filed with the Legal Affairs Bureau. The day the registration is applied for becomes the company's date of establishment. After that, notifications are made to the tax office, the prefecture, the municipality, the pension office and others. Following materials published by government agencies, this article sets out the general flow when promoters set up a small stock company that has no board of directors.To make a stock company, you first prepare a document called the articles of incorporation, which sets out the company's rules, and have it checked at a government office called a notary office. Next, you pay in the money that forms the base of the company (the capital) and apply to a government office called the Legal Affairs Bureau to register that you have made the company. After that, you also let the tax office and others know that the company now exists. There are an order and deadlines, so it is important to proceed while checking the guidance of the government agencies.
A sole proprietorship can be started simply by filing a notice of business start-up with the tax office. However, some procedures are better completed early, such as the application for approval to file blue-form returns, notifications when hiring people, and preparing account books. Under "If you are starting a business", the National Tax Agency lists the necessary notification forms, and each document has its own deadline. Following the Agency's guidance, this page sets out what to decide before you start, the documents to file, and the general flow after you start. The documents you need vary with individual circumstances, so please make the final check with the tax office or a professional.You can start a "sole proprietorship", running a shop or a job in your own name, by handing a paper called a notice of business start-up to the tax office, one of the government offices. There are also the application for "blue-form returns", which makes the tax system easier to use, and notifications for when you hire people. Each has a deadline, so it is reassuring to check early. If you are unsure, asking the tax office or a professional is the surest way.
Once you start a sole proprietorship, recording each day's transactions in account books is the foundation of your tax return. The National Tax Agency explains that a person who has received approval to file blue-form returns and meets certain requirements can deduct up to 650,000 yen from income (550,000 yen or 100,000 yen depending on the requirements) as the special blue-form return deduction. The amount depends on how the books are kept (double-entry or simple bookkeeping) and how the return is filed (for example, through e-Tax). Following the Agency's guidance, this article sets out the bookkeeping basics worth checking right after you start.When you start a shop or a job, it is important to record every day when money came in, how much, and how much went out. This record is called an account book. There is a system in which a person who keeps the books properly and completes the required procedures can subtract a certain amount from their income when calculating tax. The amount you can subtract changes depending on how you keep the records. If you are unsure, you can ask the tax office or a tax accountant.
This page summarizes and explains materials published by government agencies. Content is as of the date each article was checked. For decisions in your own case, always consult the original sources and professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence. To search by category or keyword, go to Find articles.