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[Supervised by a former successor of a machining company and tax accountant] Guide to Reviewing Borrowing in the Manufacturing Industry

Although there are profits, there is no cash left after monthly repayments. The cause lies not in performance, but in the borrowing method. I will summarize the review in 8 pages and present it to you.

"I want to add one more machining center. We're making a profit. Yet, the bank's response is slow..." In such cases, the cause may not be performance, but rather the current structure of borrowing. Companies with heavy monthly repayments tend to share three common factors: (1) They are borrowing working capital through long-term loans, (2) They have multiple loans with varying repayment schedules, (3) Their repayments exceed their profits. None of these three issues stem from the president's lack of effort; they are problems with the borrowing method. The borrowing method can be reviewed. This document provides a measure to assess the burden of repayments (the ratio of repayment resources to annual repayment amounts) and guidelines for evaluation, followed by an explanation of four strategies in the recommended order: (1) Reallocation of fund usage (the only method that does not damage credit), (2) Consolidation of loans, (3) Extension of repayment periods, (4) Rescheduling. If you skip the order, you will only realize it after your evaluation within the bank declines. An example calculation is included, showing a company with a total borrowing of 80 million yen reducing its annual principal repayment by half without decreasing its balance by even one yen. This is an 8-page document aimed at manufacturing business owners. It is available as a gift from the catalog below.