{"id":60310,"date":"2026-05-16T08:00:55","date_gmt":"2026-05-15T23:00:55","guid":{"rendered":"https:\/\/norimen.net\/?p=60310"},"modified":"2026-05-16T18:35:20","modified_gmt":"2026-05-16T09:35:20","slug":"abolition-of-promissory-notes-for-general-contractors","status":"publish","type":"post","link":"https:\/\/norimen.net\/en\/general-contractors-promissory-note-abolition\/","title":{"rendered":"Will the Elimination of Promissory Notes Make Life Easier for Subcontractors? | Behind the Scenes of the Major Contractors\u2019 Abolition of Promissory Notes and the New Fee Market"},"content":{"rendered":"

Hello, everyone.
\nThis is Enta.<\/p>\n

I saw this news story the other day.<\/p>\n

\"Economic
Economic Conditions Surrounding the Abolition of Promissory Notes<\/figcaption><\/figure>\n

Major General Contractors Abolish Promissory Notes and Shift to Cash Payments<\/a>That's the story.<\/p>\n

To be honest, I\u2019m thinking, \u201cIt\u2019s about time!\u201d but this is actually a pretty big deal for small companies.<\/p>\n

\"A<\/p>\n

\n

Why Did Major General Contractors Use Promissory Notes?<\/h2>\n

To begin with, why did major general contractors rely so heavily on promissory notes?
\nThere's a reason for this.<\/p>\n

The amounts of money major general contractors handle are just mind-boggling.
\nEvery month, 100 billion to 200 billion yen changes hands at a rapid pace.
\nThe question is, can you actually come up with that much cash every month without a hitch!?<\/p>\n

There's no way the company would be hoarding that much cash in a safe, lol.<\/p>\n

Even if a company is profitable, its net assets are not the same as its cash.
\nIn our case, this refers to drilling machines and spray machines, such asFixed Assets<\/strong>is set to.
\nSo, even though the business should be profitable, it\u2019s surprisingly short on cash.
\nIn other words, they're borrowing the shortfall from the bank to keep things running.<\/p>\n

You're probably wondering, \"So where does all that cash go?\"
\nThat money has gone toward the cost of materials and machine repairs we paid for last month.
\nI'll be back eventually, but it's just not right now, lol.<\/p>\n

\"Trimble<\/p>\n

\n

A company with debt = a company with credibility<\/h2>\n

You often hear people say things like, \u201cA debt-free company is a great company!\u201d
\nThis is half right and half wrong.<\/p>\n

Actually,Most major companies operate by rolling over their bank loans.<\/strong>That's normal.
\nBeing debt-free is impressive in its own right, but on the other hand,\"We haven't built up enough credit.\"<\/strong>It can also be viewed this way.<\/p>\n

Credit means social credibility.<\/p>\n

It's the same with mortgages, isn't it?
\nSome people can borrow 30 million yen, while others can only borrow 15 million yen.
\nPeople who have consistently made payments over time have a high credit rating.
\nThey won't lend money to people who repeatedly default on payments.
\nIt's the same logic as not wanting to lend money to a friend who never pays you back lol (Don't lend or borrow in the first place!)<\/p>\n

In other wordsThe fact that \u201ca company can borrow anywhere from hundreds of millions to hundreds of billions\u201d indicates that it has that level of social credibility.<\/strong>That's the proof.<\/p>\n

For reference, according to aggregate data from the Research Institute for Construction Economics (RICE), a general incorporated foundation,The total interest-bearing debt of major, mid-sized, and medium-sized general contractors stood at approximately 4.3 trillion yen as of the second quarter of fiscal year 2024.<\/strong>...This represents an increase of approximately 14.11 TP3T compared to the same period last year. (The fact that many businesses are taking on more debt suggests they\u2019re likely making a profit! Banks generally won\u2019t lend to companies that aren\u2019t profitable!)<\/p>\n

That's 4.3 trillion yen\u20144.3 trillion.
\nIf you add the lease obligations to that, it's even bigger.<\/p>\n

\n

\ud83d\udcca Actual Amount Borrowed (as of the end of March 2025; on a consolidated basis)<\/h2>\n\n\n\n\n\n\n\n\n
Company Name<\/th>\nConsolidated Interest-Bearing Debt<\/th>\nNon-consolidated Interest-Bearing Debt<\/th>\nSource<\/th>\n<\/tr>\n<\/thead>\n
Kajima Corporation<\/td>\n792.0 billion yen<\/td>\n288.9 billion yen<\/td>\nFinancial Results for the Fiscal Year Ended March 2025<\/td>\n<\/tr>\n
Shimizu Corporation<\/td>\n591.3 billion yen<\/td>\n488.4 billion yen<\/td>\nFinancial Results for the Fiscal Year Ended March 2025<\/td>\n<\/tr>\n
Obayashi Corporation<\/td>\n362.7 billion yen<\/td>\n(Individual disclosures are limited to specific points in time.)<\/td>\nFinancial Results for the Fiscal Year Ended March 2025<\/td>\n<\/tr>\n
Taisei Corporation<\/td>\n315.5 billion yen<\/td>\n(Limited to individual disclosures)<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\"A<\/p>\n

\n

In the end, a similar system ends up staying in place, lol.<\/h2>\n

So, the abolition of promissory notes this time.
\nThe reason behind this isAs a government policy, the goal is to reduce the number of paper promissory notes and checks exchanged to zero by the end of fiscal year 2026 (end of March 2027).<\/strong>That's my goal. (I think I mentioned this in a previous post.)
\nJapan Bankers Association, \u201cVoluntary Action Plan for the Full-Scale Digitization of Bill and Check Functions,\u201d July 2021<\/a>\uff09<\/p>\n

In the case of major companies, they can\u2019t just suddenly announce, \u201cWe\u2019re discontinuing this starting tomorrow!\u201d
\nI think they\u2019ve been working with the bank to restructure the accounting procedures, and it\u2019s taken them over a year to finally get it done.<\/p>\n

For a company as small as ours\u2014one that could be blown away by a gust of wind\u2014all we\u2019d have to say is, \u201cWe\u2019ll make the change starting next month!\u201d lol<\/p>\n

So, what appears after the handprint disappears is\"Densai (electronically recorded receivables)\" and \"factoring\"<\/strong>\u3002
\nEven though the paper is gone, the underlying mechanism remains essentially the same.
\nAnd thenCommissions are being skimmed off here and there by contractors acting as middlemen.<\/strong>And so on.<\/p>\n

It\u2019s not like we subcontractors are the ones creating this kind of situation, so in the end, it\u2019s mostly dictated by the major companies\u2019 convenience and way of thinking, lol.<\/p>\n

\n

Don't underestimate the fees, lol<\/h2>\n

Some people say, \u201cA small fee is no big deal.\u201d
\nBut when it comes to scale, that changes everything.<\/p>\n

When an individual withdraws cash from a convenience store ATM, the fee is less than 200 yen at most.
\nFor an individual, that\u2019s the kind of amount where you\u2019d just shrug and say, \u201cOh well, whatever.\u201d (Don\u2019t underestimate it!)<\/p>\n

But when it comes to a company, though...An outrageous amount of money<\/strong>will be.
\nFor a major general contractor, the annual commission amounts to several hundred million or more.
\nEven for a small company like ours, we lose around 1 million yen a year.<\/p>\n

By the way,Seven Bank's standalone ordinary revenue for fiscal year 2024 (ending March 2025) was 135.7 billion yen.<\/strong>\u3002
\nMost of them come from partner financial institutionsATM Acceptance Fee<\/span><\/strong>That's it.<\/p>\n

A single machine generates 135.7 billion yen for a fee of just a few hundred yen per transaction.
\nATM fee: 200 yen per transaction.
\nWhile people are underestimating this as \"just a little,\" a massive market for service fees is already in motion.
\nElectronic invoices and factoring will also gradually lose ground due to the same underlying structure.<\/p>\n

\"A<\/p>\n

\n

Reading the Signs of the Times<\/h2>\n

It\u2019s great news for us subcontractors that the payment terms from major general contractors are improving.
\nThis is an indisputable fact.<\/p>\n

However, while paper promissory notes are disappearing, mechanisms that have simply taken on a different form (electronic promissory notes and factoring) are taking their place....
\nIt is precisely when the system changes that,\"Who pays the fees, and who pockets them?\"<\/strong>You need to calmly assess the situation around you\u2014like that. Why is that? lol<\/p>\n

These are becoming difficult times.
\nHowever, if you keep an eye on what these major players are doing, you\u2019ll be able to see the broader trends in the industry.
\nOne invoice, one bank transfer\u2014and what\u2019s really going on behind the scenes?
\nJust being aware of that will change the way you think, act, and approach things going forward.<\/p>\n

These are tough times, and the effects of the war will continue to become increasingly apparent!<\/p>\n

Be sure to gather all the information and take a good look at it.<\/p>\n

 <\/p>\n

See you later.<\/p>\n

Payments to subcontractors are generally made in cash.<\/a><\/p><\/blockquote>\n