The Financial Services Agency's working group on funding for growth companies holds its second meeting on October 9. Its agenda lists two hearings, two secretariat presentations and a discussion session. The papers circulated with it set out questions for the panel and proposals from industry. They are discussion points, not approved policy, and the meeting had not taken place when the agenda was published.
Lighter rules for lenders to "professionals"
The secretariat suggests defining "professional" borrowers by the list in the Commitment Line Act, which has 13 categories. They include large companies under the Companies Act, defined as those with capital of ¥500mn or more or liabilities of ¥20bn or more, as well as listed companies, special-purpose companies and registered investment corporations.
For moneylenders that lend only to such borrowers, the secretariat asks whether the application of three sets of rules should be made more flexible. The first is entry rules: the registration capital requirement, the requirement to appoint a money lending business handler, and renewal. The second is conduct rules: documents before and at contract signing and on receipt of repayment, plus collection rules. The third is rules on assigning loans to low-risk assignees such as banks and insurers. Registration today requires minimum net assets of ¥50mn and renewal every three years.
The secretariat also asks whether those lenders should be supervised by the national government, whether lenders that also serve non-professionals should get the same conduct-rule relief on professional loans, and whether commitment fees from large companies should be excluded from deemed interest. At present a moneylender that takes a commitment fee on an undrawn line can face administrative action even with a large borrower. Banks do not. The secretariat further asks whether the same borrower standard should apply to easing entry for foreign lenders without a Japanese office that join syndicated loans.
The Japan Private Equity Association wants the Money Lending Business Act clarified and simplified for LBO mezzanine lending to professional investors and businesses. The secretariat notes that fund-form moneylenders ran 17 structured-finance funds with ¥185.5bn in loans outstanding at end-March 2026, and that fund lives of nearly ten years make registration renewal necessary.
A working-group member and lawyer backs the Commitment Line Act list as a starting point, with changes such as admitting funds whose general partner qualifies. He argues that lenders making only professional loans should still be registered or notified and supervised by the FSA.
The nonbank bond capital floor
The Nonbank Bond Act, in force since 1999, lets moneylenders issue bonds if they register. Registration requires capital of at least ¥1bn and two people with three or more years in loan screening. Forty-seven companies had ¥17.7tn of bonds and similar instruments outstanding at end-March 2026.
The secretariat says a nonbank that is itself a startup may struggle to meet the capital test and so to raise funds. It asks whether registration should limit bond funding given venture debt's role. It also asks whether moneylenders whose main business is lending, and that issue bonds or file securities reports, should have to disclose loan balances and bad-debt notes.
The Fintech Association of Japan proposes cutting the capital requirement to ¥100mn and abolishing registration, while keeping the law's own disclosure rules. It cites venture debt of ¥29.2bn in 2025, 13.2% of startup debt financing, with average funding per company up from about ¥280mn to about ¥390mn. The member lawyer would go further for private placements, which he says should be exempt altogether. For public bonds he feels the rules have lost their rationale.