This article has been translated. For the original please click here.

Effective financing system and utilization points for cash flow in the clinic management of Corona



Article supervision

Takayuki Kodaka Tax Accountant
Takayuki Kodaka Tax Accountant

Koinobori Accounting Office / Koinobori Consulting Co., Ltd.

Accounting office with Professor Takayuki Kodaka

Koinobori Accounting Office / Koinobori Consulting Co., Ltd. Koinobori Accounting Office / Koinobori Consulting Co., Ltd.
Contact: 03-4500-8112

In 2020, the new coronavirus epidemic had a major impact on many operators. In a situation where the future is uncertain, businesses that are premised on the participation of real people will re-examine their relationships with customers and take measures, or make major changes to the business model itself to continue their business. I'm continuing.

Cosmetology clinics, which are services that require face-to-face treatment with patients, are also in a difficult situation. Since the recommendation of "stay home" under the state of emergency , the decrease in the number of visitors has become a serious problem.

In order to support the management of businesses affected by the corona disaster, various support systems have been established in terms of both the loan system and the credit guarantee system. There may be some business owners who are already using it.

Today, I will consider how to select a number of cash flow support systems and how to utilize the funds , based on the introduction of the loan system.

What should be the basis for choosing a loan system?

Effective financing system and utilization points for cash flow in the clinic management of Corona

At present, there are several loan schemes that businesses can apply for. However, instead of jumping into the dark clouds, you should make a selection based on certain criteria when applying.

Therefore, I would like to recommend the idea of "using loans with high hurdles first." In other words, among the loans that your hospital can receive, consider from the perspective of " Which loan is difficult to borrow due to strict examination or complicated procedures ", and select the loan in order from the difficult one.

When the financial condition is good and not affected by the corona epidemic, ordinary loans such as proper loans are available. However, if business performance deteriorates due to the corona epidemic, those loans will be undesired or in poor condition. It's not too late to take advantage of corona lending.

This method has the disadvantage of incurring financial costs (interest and guarantee fees) in raising funds in the near future, but it can be said to be the most reliable method if you really take the best measures to prevent your hospital from being destroyed .

In order to develop the company over the long term, it is necessary to have the perspective of not crushing the company. To that end, it is important to make a profit, but it is also important to be able to borrow money from a financial institution in the event of an emergency.

To make effective use of the funds obtained from the loan

Management must think in order to make the best use of the funds obtained from the loan. It is to draw a cash flow plan in the medium to long term (5 years, etc.) . Without a plan, there is no way to go.

You can't be optimistic in unpredictable situations, but if you think you can afford it, spend your money with the following in mind:

  • ① Do not waste money
  • ② Select an investment that will be beneficial to your business
  • ③ Measure the investment effect exactly

Especially when you get a loan, you get a lot of money and you tend to waste money because your immediate funds will be moistened. The manager should never forget ①. A mechanism for autonomy, such as managing accounts separately so that you do not accidentally touch them, is also effective.

And ② and ③ are also important viewpoints. The manufacturers are also actively conducting business, but we must not neglect to determine whether it is really a necessary investment for our hospital . It is also important to properly measure and analyze the data on how many years it will be possible to recover.

These three points are something that management should always be aware of when investing in a business. Please take this opportunity to look back on whether it has been fully implemented.

Various loan systems to support businesses

"Loan" is a typical means of raising funds for opening and running a clinic. In a word, there are a wide variety of systems that can be applied depending on the executing agency, its purpose, and requirements.

Loans are basically divided into government-affiliated financial institutions and private financial institutions. This time, special measures such as relaxation of requirements were set up for the purpose of supporting the management of businesses affected by the new coronavirus epidemic, but it is easy to understand the relationship with the existing system that can be used in normal times. It is summarized in the figure.

Various loan systems to support businesses

In this article, we will introduce these typical loan systems below. This is a very advantageous system for businesses that receive preferential treatment in various respects such as preferential interest rates (low interest rate, virtually no interest rate), deferred repayment (up to 5 years), unsecured, and unguaranteed. Applicable conditions are set for each, so please refer to them while checking.

(1) Ordinary loans from private financial institutions

Although it is a means of raising funds from normal times, let's first hold down loans from private financial institutions. This is because even with coronavirus, if you take the idea of "using a loan with a high hurdle" , it should be the first option .

Loans from private financial institutions are broadly divided into proper loans and loans with guarantee associations, and the higher hurdle is proper loans .

A proper loan is a business loan provided by a private financial institution that is not guaranteed by the Credit Guarantee Association and is directly provided at 100% responsibility.

On the other hand, "loan with guarantee association" is through the public institution "credit guarantee association" that supports small and medium-sized enterprises and small businesses as a guarantor when receiving a loan from a financial institution and makes it easier to receive a loan. It is a loan that is established by doing. In the unlikely event that the borrower's repayment is delayed, the Credit Guarantee Association will make a "prepayment" to the financial institution on behalf of the borrower. In consideration of using this credit, SMEs and small businesses are required to pay a prescribed credit guarantee fee to the Credit Guarantee Association.

Since the risk of bad debts can be reduced (0% to 20% depending on the share of responsibility of the bank) by having a joint guarantee by the association, as a basic stance of financial institutions, SMEs and small businesses For loans to customers, we preferentially recommend loans guaranteed by the Credit Guarantee Association. It is thought that you will be asked to use it as much as possible within the guarantee limit frame guaranteed by the association.

As a business operator, it is best to get a proper loan that does not require you to pay a credit guarantee fee in addition to the borrowing rate. However, it goes without saying that it is difficult for private financial institutions to obtain proper loans because they are cautious about lending to companies that have no transaction record or young companies that have been in business for a year or two.

However, it seems that some financial institutions are considering proper financing depending on the figures of the settlement of accounts after the third term. If you have a certain level of business performance, you should aim for a proper loan contract that does not require you to pay a credit guarantee fee . The idea of whether or not collateral such as real estate is necessary for the actual examination varies depending on the financial institution, so if you want to raise funds without waste, we recommend that you borrow the knowledge of a tax accountant who has a track record of transactions.

(2) Corona loan system by government-affiliated financial institutions (Japan Finance Corporation, The Shoko Chukin Bank)

With the outbreak of the new coronavirus, government-affiliated financial institutions are taking special measures to give preferential treatment to businesses to be supported by relaxing the requirements of the existing system.

The loan system provides three levels of support, allowing businesses in more difficult business conditions to receive the widest incentives .

The SMEs and national businesses described in this explanation are classified according to the scale of the business to be financed, but there is no clear standard for these classifications, and as a guide, sales are 500 million yen or more, and capital is 1,000. Companies of 10,000 yen or more are eligible for SME business, and those less than that are eligible for national life business.

Stage 1: No interest rate cut- "Safety net lending"

Safety net lending is a temporary deterioration in business conditions such as a decrease in sales due to external factors such as social and economic changes, but it is expected that its business performance will recover and develop in the medium term. It is a system that supports the strengthening of the management base of small and medium-sized enterprises.

The system itself has existed for some time, but the requirements have been relaxed and the number of target businesses has been expanded in response to the new corona. However, interest rates are normal, and the reality is that businesses that meet the corona loan requirements are choosing to do so.

Overview of safety net lending
Target business operator Businesses that are expected to have an impact in the future
Loan limit SME: 720 million yen / National business: 48 million yen
Use Working capital / equipment funds
Loan period Working capital: Within 8 years / Equipment funds: Within 15 years
Deferment period Within 3 years
interest rate Base interest rate: SME 1.11% / National business 1.86%
Documents required for application [National Lifestyle Business] Documents to be submitted when applying for "Special Loan for Coronavirus Infectious Diseases" (Japan Finance Corporation)
Procedure flow After receiving the application (mail, bring-in, internet application), there will be an interview / examination

Second stage: Interest rate cut by 0.9%-"Special loan for new coronavirus infection"

Businesses that are eligible for loans above this stage basically have numerical requirements for business conditions such as "sales decrease of 5% or more".

The new coronavirus infectious disease special loan is a loan system provided by the Japan Finance Corporation and the Okinawa Corporation. The interest rate is set at a uniform rate regardless of creditworthiness or collateral, and the interest rate is reduced by 0.9% for up to three years after the loan . The deferment period is up to 5 years, and past existing debt can be refinanced.

Outline of special loan for new coronavirus infection
Target business operator Those who have suffered a temporary deterioration in business conditions due to the influence of the new coronavirus infection and fall under any of the following (1) or (2) (1) Sales in the last month have decreased by 5% or more compared to the same period of the previous year or the year before last. (2) If the business calendar is 3 months or more and less than 1 year and 1 month, or if it is not possible to simply compare with the same period of the previous year, such as companies that are expanding capital investment or employment that are directly linked to sales increase such as store increase or merger. Is a person whose sales in the last month have decreased by 5% or more compared to any of the following
・ Average sales for the past 3 months (including the last month) ・ Sales for December 1st year of Reiwa ・ Average sales for October-December 1st year of Reiwa
Loan limit SME: 600 million yen / National business: 80 million yen
Use Working capital / equipment funds
Loan period Working capital: Within 15 years / Equipment funds: Within 20 years
collateral Unsecured
Deferment period Within 5 years
interest rate Base interest rate-0.9%: SME 0.21% / National business 0.36%
Rate cut limit Small and medium-sized business 200 million yen / national business 40 million yen
Documents required for application [National Lifestyle Business] Documents to be submitted when applying for "Special Loan for Coronavirus Infectious Diseases" (Japan Finance Corporation)
Procedure flow After receiving the application (mail, bring-in, internet application), there will be an interview / examination

In addition to this, the interest rate is -0.9% for the "new coronavirus countermeasure loan" for small businesses that have received management guidance from the Chamber of Commerce and the "crisis response loan" of the Shoko Chukin Bank. This is a loan system included in the special measures.

For details and procedures, please check the website established by each executing agency or through your tax advisor.

Stage 3: Really interest-free loan- "Special interest supply system"

A mechanism to collectively subsidize the amount equivalent to interest for up to 3 years , especially for businesses whose sales have dropped sharply, among the businesses that borrowed using the loan system with an interest rate of -0.9%, which is the second stage. is. The executing agency is the Organization for Small & Medium Enterprises and Regional Innovation.

Outline of special interest supply system
Target business operator Special loan, etc. for businesses that borrowed using "New Coronavirus Infectious Diseases Special Loan", "New Corona Countermeasures Maru Keizai Loan", or "Crisis Response Loan" by The Shoko Chukin Bank, etc. Those who meet the following requirements by comparing the sales of one of the last one month or the following two months at the time of loan application with the sales of the previous year or the same month of the previous year.

①Self-employed (including freelancers, limited to small businesses): No requirements ②Small businesses (corporations): Sales decreased by 15% ③SMEs: Sales decreased by 20%
Loan limit 600 million yen
period Initial 3 years after borrowing (longest)
Maximum loan amount to be replenished Small and medium-sized businesses, Shoko Chukin, etc. 200 million yen / National business 40 million yen
Documents required for application Receive the following documents required for application from the borrowing financial institution, etc.

・ Special interest supply subsidy grant application and invoice ・ [Attachment 1] Pledge / Consent ・ [Attachment 2] Declaration ・ Envelope for the secretariat
Procedure flow・ Apply with the above documents (mail, internet application)
・ After reception, the secretariat will examine and grant a subsidy according to the result.

(3) Corona financing by private financial institutions (banks, credit unions, etc.)

The government is taking measures to expand the corona loan system to private financial institutions by utilizing the institutional loans of prefectures, etc., in order to further thoroughly support the financing of businesses. In addition to the conditions at the time of financing such as virtually no interest, unsecured, and deferment of up to 5 years, the guarantee fee for credit-guaranteed loans is half or zero, and the refinancing guarantee fee is also zero, in order to promote the financing of businesses. Widespread support is provided.

"Safety Net Guarantee Nos. 4 and 5" and "Crisis-related Guarantee"

This is a cash flow support system that covers small and medium-sized enterprises who are having trouble with their management stability, which is covered by a guarantee separate from the general guarantee (up to 280 million yen). What is Safety Net Guarantee No. 4? When companies nationwide are seriously damaged by a sudden event such as a natural disaster, No. 5 is a small and medium-sized enterprise belonging to an industry whose business performance is deteriorating nationwide. It is triggered to fund the economy.

It is activated by regarding the impact of the new coronavirus as a disaster, and the target is extended to all prefectures and all industries, so if the conditions for sales decrease are met, a beauty clinic can also be used .

Safety Net Guarantee Nos. 4 and 5 (Overview)
Target business operator・ Certification conditions for Safety Net Guarantee No. 4 ① Continued business for one year or more in the designated area ② After being affected by the disaster due to the occurrence of the disaster, in principle, the last one month Sales, etc. are expected to decrease by 20% or more compared to the same month of the previous year, and sales, etc. for the next 3 months including 2 months are expected to decrease by 20% or more compared to the same period of the previous year (sales). Regarding the decrease in higher grades, approval from the mayor of the municipality is required)

・ We are engaged in businesses that belong to the industry designated as the certification condition for Safety Net Guarantee No. 5, and sales, etc. in the last three months have decreased by 5% or more compared to the same period of the previous year.

* Currently, all prefectures and all industries are targeted, and the designated period is until March 1, 3rd year of Reiwa.
Guarantee limit and guarantee ratio・ Safety Net Guarantee No. 4 Guarantee 100% of borrowing debt with a separate frame (up to 280 million yen) from the general frame

・ Safety net guarantee 80% of debt is guaranteed in a separate frame (up to 280 million yen, but the same frame as No. 4) from the No. 5 general frame.
Loan period Within 10 years
Deferment period Up to 5 years, unsecured
Documents required for application・ Certification application 2 copies (downloadable depending on the local government office or local government)
・ Documents that give an overview of the company, such as company information ・ A copy of the registry (corporation)
・ Financial statements or tax returns ・ Documents certifying sales decrease such as income statement and sales ledger ・ Sales statement (local government window or download)
Procedure flow・ Submit the certification application to the window of the business and industry section of the municipality where the head office is located (attach any documents certifying the fact)
・ Obtain certification ・ Apply for a guaranteed loan with the certificate from the desired financial institution or the credit guarantee association of your location

* However, there is also a movement to promote one-stop procedures by using financial institutions as a contact point in order to realize prompt financing, in which case the flow will be as follows.
・ Consultation and application for loans to financial institutions ・ After the financial institution prepares and confirms documents and credit information, proceed with the application for accreditation as a proxy to the municipality and the examination application to the guarantee association ・ Financial institution according to the examination result Makes a loan

In addition to this, Safety Net No. 4 is also a "crisis-related guarantee" that guarantees 100% of debt obligations for SMEs and small businesses in all industries nationwide, whose sales will decrease by 15% or more from the same month of the previous year. , 280 million yen is prepared separately from No. 5. The credit guarantee limit secured by this, including the safety net guarantee limit, is up to 560 million yen.

(4) Means that can be used in parallel with corona financing

1. Refinancing with existing borrowings

The Japan Finance Corporation and other special loans for coronavirus infectious diseases and the Shoko Chukin Bank's crisis response loans stipulate that each institution can refinance its existing debt. In other words, even if you already have a loan, you can make good use of this system and make it a target of virtually interest-free .

Compared to the conditions of a normal loan system, corona loans are very good conditions for businesses in terms of interest rates, guarantees, and collateral. Therefore, we recommend that you consider refinancing with existing borrowings for those who can afford the funds even if sales decrease, or those who judge that there is no need to procure new funds.

2. Use of "medical loan business" by Welfare and Medical Service Agency

Currently, long-term working capital (hereinafter referred to as "new coronavirus") is provided by the Welfare Medical Organization for medical facilities, etc. that have been affected by a decrease in sales or business suspension due to the facility's own responsibility due to the new coronavirus infection. We provide preferential loans (called "correspondence support funds").

Furthermore, for hospitals and clinics where the monthly revenue decrease was 30% or more (compared to the same month of the previous year) in September, the loan limit, unsecured loan amount, and interest-free loan amount were further expanded. , We are promoting priority support.

The outline is summarized below, but the description is limited to the contents for clinics. If you would like to know more about the hospitals, nursing care facilities / nursing care clinics, midwives, medical staff training facilities, and designated home-visit nursing services that are eligible for the loan, please see the website of the Welfare Medical Organization .

Overview of medical loan business
Target business operator Clinics with lower sales or fewer users compared to the same period of the previous year
Loan limit Whichever is higher, the following amount or "12 times the amount of decrease in sales from the same month of the previous year" ・ Decrease of 30% or more: 50 million yen ・ Decrease of less than 30%: 40 million yen
Unsecured loan・ 30% or more decrease in sales: 50 million yen ・ Less than 30% decrease in sales: 40 million yen
Loan interest rate Scope of interest-free loans for the first 5 years ・ 30% or more decrease in sales: 50 million yen ・ Less than 30% decrease in sales: 40 million yen ・ Other than the above: 0.2% (the part exceeding the above amount for the initial 5 years and the part after the 6th year)
Redemption period (deferred period *) Within 15 years (* Within 5 years: grace period for payment of principal)
Documents required for application The format can be downloaded from the website ・ Borrowing application form ・ Joint guarantor consent form ・ Copy of insurance medical institution designation notice ・ Register copy or registration certificate (corporation)
・ Financial statements and final income tax returns for the most recent period
Procedure flow・ Sending of loan application form, etc. ・ Examination by JQA (inquiry when there is a defect, etc.)
・ Sending a job offer notification and contract documents that need to be filled in ・ Returning the completed contract and seal certificate, etc. ・ Transfer of loan funds

In addition, we have taken preferential treatment for existing loans, saying, "For the time being, the repayment of principal and interest for 6 months and the payment of principal and interest for another 3 years (up to 3 years and 6 months) depending on the situation of the business operator will be postponed. We will respond to your inquiries. "

It is also an option to identify the loan system with the support of an advisor tax accountant or financial institution

The long-lasting days of corona wreckage. Many managers are working on ingenuity to win from every angle, such as reviewing management and business reforms. Cosmetology clinics, which are basically based on face-to-face treatment and have large sales from repeaters, are likely to face cash flow issues as working capital in the near future or as investment in the medium to long term.

In this article, we have introduced some systems that offer preferential treatment as corona loans, as well as systems that support cash flow such as ordinary loans and refinancing. If you want to decide the order of choice , it is recommended that you first consult with ordinary loans, and then with proper loans, which have higher hurdles . If that doesn't work, or if you want to get a loan in addition to a proper loan, consult a loan with a guarantee association, and gradually consider options with lower hurdles .

As I mentioned at the beginning, the use of corona loans is not late even after the financial situation deteriorates and it becomes difficult to obtain ordinary loans. Business owners need the skills to get the money they really need and make the right investments at the right time for business growth over the next few years.

However, making a solid investment in the right investment is not as easy as it sounds. Let's share fund management, business development, and future prospects on a daily basis, and face each other with the support of an adviser tax accountant who can consult with you.

Regarding the loan system, the Japan Finance Corporation, the Ministry of Economy, Trade and Industry, and financial institutions with which we have a relationship also have consultation desks. If you are interested, please call and check the details. Since the financial institution is actively lending, it will respond smoothly.

Article supervision

Takayuki Kodaka Tax Accountant
Takayuki Kodaka Tax Accountant

Koinobori Accounting Office / Koinobori Consulting Co., Ltd.

After working for a large and small tax accountant corporation, became independent. He has been active as an advisory tax accountant in many beauty clinics and is the representative tax accountant of Koinobori Accounting Office.

Accounting office with Professor Takayuki Kodaka

Koinobori Accounting Office / Koinobori Consulting Co., Ltd. Koinobori Accounting Office / Koinobori Consulting Co., Ltd.
Contact: 03-4500-8112