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Bank Loan in Japan

The previous article introduced the Shinkin Bank, which is the most popular financing method of Cooperative institutions in Japan.

This article will elaborate on the characteristic of two types of Japanese banks to help people choose a financing method that is more suitable for them, you can also learn about what kind of documents you need to prepare before you apply for a loan from a bank.


City bank

City banks (都市銀行) are ordinary banks that have their main store in metropolitan areas such as Tokyo and Osaka and are operating business nationwide. Although there are no clear legal standards, the FSA(Financial Services Agency) classifies, Mizuho Bank(みずほ銀行), Mitsubishi UFJ Bank(三菱UFJ銀行), Sumitomo Mitsui Banking(住友三井銀行), and Resona Bank(りそな銀行), as city banks, Saitama Resona Bank(埼玉銀行) is also recognized as city banks in some places. Besides, although two megabanks, “Shinsei Bank (新生銀行) and Aozora Bank(あおぞら銀行)” are classified as “Other” by the FSA due to the peculiarity of the old long-term credit bank law, they are city banks in a broad sense.

Regional bank

A regional bank is a financial institution that has a main store in each prefecture and operates mainly in that region. For instance, Ikedasenshu Bank(池田泉州銀行), Kyoto Bank(京都銀行), Siga Bank(滋賀銀行), Minato Bank(みなと銀行), and Kiyo Bank(紀陽銀行)are common regional banks that have a relatively big influence in the area where it is located in the Kansai area.


City bank

  • High creditworthiness to collaborate with business partners

It is very helpful for your publicity if you are financed from a City bank. It will increase your creditworthiness and people will have a good impression on you if you use a city bank, which is well known in Japan, as a designated transfer account for sales proceeds. Moreover, It has not only a nationwide network, but also extensive payment services such as internet banking, international transactions, and foreign exchange handling, which make it more convenient for you to expand your business.

  • Get a large amount of know-how from overseas transactions.

Since city banks also have branch networks in major overseas cities, It is a better choice for companies who engaged in overseas operations or foreigners who also want to utilize the overseas resources to start a business in Japan.

  •  Work quotas

Although city banks operate microfinance business, most of the city banks have work quotas so that salesmen are inclined to focus on high-value projects than small-value projects to meet the quotas. As a consequence, it may be difficult for a company that has just started a business or a company that has few transactions with other financial institutions and has no repayment record to be financed from a city bank.

  • Strict examination

Of course, in order to apply for a loan from a large bank and succeed in raising funds, it is necessary to secure a certain annual sales. However, it is also important to properly prepare a financial statement that can prove the stability of your business and a business plan that can elaborate the use of funds and the development direction of your business, only then will you be more possible to pass the examination of a city bank.


Regional bank

  •  Friendly to SMEs

The scale of a regional bank is smaller than that of a city bank and it supports small loans as well. Therefore, it is a better choice for first-time financing compared with city banks. However, It only works at least after you have filed the tax return of your 2nd business term.

  • Convenient to be chosen as the main bank.

Within the prefectures where local banks are located, there are often more branches, stores, and ATMs than city banks. So it is suitable for people who only operate your business within the prefecture.

  • The Internet banking system is incomplete

With the spread of the Internet, more and more places are implementing transaction services on the Internet. However, since many Internet banking systems of regional banks are still inferior to that of city banks and Internet banks, maybe it is inconvenient for the company mainly use online payment.

How to apply for a loan?

Whether you are a corporation or a sole proprietor, there are lots of documents required to receive a business loan at a bank, and the high degree of completion is an important indicator that determine whether you can pass the examination. It is said that required documents occupy more than 80% of the content of the examination.

  • Prepare the documents required as a minimum.
ID cardRecord of withholding income tax
Certificate of registered sealBank book
Resident cardDocuments showing the amount of own fund.
Tax certificate for two to three yearsPurchase property contract
Final income tax return 
  • Prepare the documents that reveal your funding plan
Business planFinancial statement (For the past three terms)
Balance Sheet (For the past three terms)Royalty certificate
Statement of cash receipts and disbursementBorrowing application

You can download some required documents from the link below:

The most important of these required documents is business plan. Even if the current business situation is not so good, It will be more likely to pass the bank loan examination if the business plan to be submitted has a positive concept that reveals the prospect of future growth.

Application timing

Make sure that you are not in arrears with tax payment. Moreover, if it is possible, you should better apply at the period when it is easy to pass the examination. Since March, September, and December correspond to the “year-end closing month” and the “fiscal first half month”, banks also wants to achieve the work quota at this time.

The next step after you submitted all the necessary documents is to wait for the requirement of interview or phone interview from bank. If the bank thinks you are trustworthy and your documents meet the conditions, you will pass the examination and receive the loan from bank.


This article reveals the features of city bank and regional bank, which can help you decide which type of bank is more suitable for you to apply for a loan for your business. It should be noticed  that whether it is an regional bank or a city bank, you need to put your mind into preparing the business plan so that it can be more possible to receive a loan.

Notes for the readers:

Please use this article only as a reference, not as a legal guideline. Therefore, will take no responsibility or liability, so far as legally possible, for any consequences of your actions. This article is written by Chen Xin, a SUGEE writer, on 9 April 2020.


[1]HOME. (2020). 都市銀行や地方銀行から融資を受けるための基礎知識 | 日本政策金融公庫での融資のご相談なら – 創業融資ガイド. 日本政策金融公庫での融資のご相談なら – 創業融資ガイド. Retrieved 23 April 2020, from

[2]地方銀行で融資を受けるメリットとデメリット、そして付き合い方のポイントとは? | 【公式】資金調達ナビ. Xn– (2020). Retrieved 23 April 2020, from

[3]地方銀行で融資を受けるメリットとデメリット、そして付き合い方のポイントとは? | 【公式】資金調達ナビ. Xn– (2020). Retrieved 23 April 2020, from

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