The Financial Services Agency's working group on funding for growth companies discussed on 9 October 2026 whether to loosen the Money Lending Business Act for loans to large companies and other professional borrowers, and whether to relax the capital requirement for nonbanks that issue bonds. The minutes record a discussion of questions, not a decision.
Who counts as a professional borrower
The FSA secretariat proposed starting from the borrower list in the Commitment Line Act, which has 13 categories of borrowers judged to have enough financial standing and bargaining power to deal with lenders. For lenders that make only professional loans, it asked the panel what it thought of easing entry rules (the capital requirement, the qualified-manager requirement and licence renewal), document-delivery and debt-collection conduct rules, and rules on assigning claims.
It also asked whether such lenders should be supervised by the national government, and whether commitment fees charged to large borrowers should be carved out of deemed interest. The secretariat said that when a credit line goes undrawn, the fee is an infinite percentage of the amount actually lent. A bank lending to a qualifying borrower is already covered by the Commitment Line Act, but a moneylender taking the same fee can face administrative action, according to the secretariat.
What the industry asked for
The Japan Private Equity Association said its members face a net-asset requirement, a manager-placement rule and moneylender registration that must be renewed every three years even though funds run for about a decade. It called regulation of mezzanine loans and commitment lines to professional investors and funds excessive. Asked by a panel member what makes renewal burdensome, the association said the paperwork was not the issue. The problem is uncertainty: a refused renewal could end a fund after three years.
The Fintech Association, citing its own figures, put 2025 venture debt at about ¥220bn including ordinary startup loans, of which ¥29.2bn was loans and bonds with warrants. It proposed cutting the Nonbank Bond Act's ¥1bn capital requirement to ¥100mn, scrapping registration and keeping the Act's own disclosure rules. The FSA asked whether registration should restrict bond funding for nonbanks, and whether the loan and bad-debt disclosure should extend to moneylenders whose main business is lending and that issue bonds or file securities reports.
Where members pushed back
Most members backed the direction. Several said the Commitment Line Act list may be too narrow, since it could exclude funds, special-purpose companies and startups with low capital. One lawyer on the panel suggested a Financial Instruments and Exchange Act-style opt-in for borrowers that ask to be treated as professionals. Another member said the panel still had to settle whether small firms and individual entrepreneurs are covered.
Supervision drew the most agreement. Members who spoke on it favoured keeping national oversight and a registration or notification system. One member cited the risk of shadow banking and of exposure moving into retail products. Another asked supervisors to examine how lenders fund themselves as well as how they lend. A member who said she lacked expertise warned about moral hazard on both sides. A professor on the panel questioned whether the Nonbank Bond Act should be cut back as far as the Fintech Association proposed, and another member wanted disclosure of bad debts kept.
The minutes give no timetable for a report or for legislation. The date of the next meeting is to be announced.