Business Safety Mutual Aid: monthly contributions of JPY 5,000 to JPY 200,000, loans up to JPY 80 million without collateralA company’s savings, so that you do not go down together when a business partner fails
This system helps prevent chain bankruptcies and management difficulties when a business partner goes bankrupt. You can borrow, without collateral or a guarantor, up to 10 times the contributions paid (capped at JPY 80 million), and contributions can be treated as a deductible expense (for corporations) or a necessary expense (for sole proprietors). Note also the treatment when you cancel and re-enroll on or after October 1, 2024 (Reiwa 6).
Key points
- The loan limit is the lesser of “the amount of accounts receivable, etc. that became difficult to collect” and “10 times the total contributions paid (up to JPY 80 million).”
- You can freely choose a monthly contribution from JPY 5,000 to JPY 200,000, and can increase or decrease it. It can be treated as a deductible expense (corporations) or a necessary expense (sole proprietors).
- Eligible bankruptcies of business partners include legal liquidation, suspension-of-transactions disposition, private liquidation, and dishonored bills due to a disaster. Absconding is not covered.
- Cancellation allowance: even for voluntary cancellation, 80% or more of total contributions is refunded if contributions were paid for 12 months or more, and the full amount if paid for 40 months or more. With less than 12 months, nothing is refunded.
- If you cancel and re-enroll on or after October 1, 2024 (Reiwa 6), contributions paid up to the day two years after the cancellation date cannot be treated as a necessary expense or deductible expense.
What to do in practice
- Decide the monthly contribution and its tax treatment after checking with your tax accountant.
- If you are considering re-enrolling, check that contributions for the two years after cancellation are not deductible or necessary expenses.
If a partner company goes bankrupt and you cannot get paid, your own company can get into trouble too. This is a national system in which you save money every month for such a “just in case,” and can borrow when you are in trouble.
- 1. Partner goes bankruptThe partner company fails
- 2. Payment hard to collectYou are about to be unable to get paid
- 3. Transaction checkThey confirm that you did business with that company
- 4. LoanYou can borrow money without collateral or a guarantor
Points
- You can save any amount you like, from JPY 5,000 to JPY 200,000 a month
- When in trouble, you can borrow up to 10 times the amount you saved (no guarantor or collateral needed)
- Even when you quit, if you kept going for a long time, you get much of the saved money back
What the words mean
- Mutual aid
- A system where members chip in money and help one another in an emergency
- Accounts receivable
- Payment for goods you have handed over but have not been paid for yet
- Organization for Small & Medium Enterprises and Regional Innovation, JAPAN (SMRJ): SMRJ: Overview of the Business Safety Mutual Aid (Small and Medium Enterprise Bankruptcy Prevention Mutual Aid System)
- Organization for Small & Medium Enterprises and Regional Innovation, JAPAN (SMRJ): SMRJ: Business Safety Mutual Aid news list (FY2026)
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult 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.