Mizuho Bank plans to roll out an ambitious lending program in May targeting over 40,000 small and medium-sized enterprises across Japan with loans backed by Orix guarantees, offering a lifeline as companies struggle with rising costs and uncertain trade conditions.
The program, Nikkei reported, will provide unsecured loans ranging from ¥5 million to ¥100 million ($35,000 to $700,000) to businesses with annual sales under ¥10 billion, with a focus on those generating less than ¥5 billion yearly. These fixed-rate loans will have terms of one to seven years, with guarantee rates between 0.35% and 6%.
Japanese SMEs are increasingly desperate for financing as they face multiple headwinds. The cash-flow indicator for small businesses plunged to negative 16.7 in the first quarter, marking a third consecutive quarterly decline according to Japan’s Organization for Small & Medium Enterprises.
The partnership represents Orix’s first guarantee arrangement with a major Japanese bank, though the financial services provider has worked with regional lenders since 2003. With Orix’s guarantees, Mizuho can extend credit to higher-risk borrowers who have exhausted their guarantees with credit corporations or startups typically ineligible for traditional financing.
The initiative comes as labor shortages push companies to boost wages and invest in digital technology while navigating the uncertain landscape of US trade policies. Mizuho aims to deploy between several hundred million yen to ¥100 billion through the program in coming years.
