TOKYO -- Japan's ruling party is proposing to cover two-thirds of rent for small businesses for up to six months to help them survive a drop in revenue during the coronavirus outbreak.
The subsidy would start next month, with a monthly cap of 500,000 yen ($4,700) for small and mid-size companies and 250,000 yen for mom-and-pop operations, according to a proposal drafted Thursday. The ruling Liberal Democratic Party will discuss the plan with coalition partner Komeito on Friday before making a recommendation to Prime Minister Shinzo Abe.
To qualify for the subsidy, businesses must have suffered a 30% or more drop in revenue in three months, or a 50% or more drop in one month. The government essentially would pay back a portion of their loans that went toward rent, and help with future payments through interest-free loans extended as part of the government's coronavirus relief efforts.
"We will need to budget almost 2 trillion yen" -- or $18.7 billion -- for the rent subsidies, LDP policy research chief Fumio Kishida said Thursday.
Five opposition parties have also submitted legislation to the Diet that would allow the state-run Japan Finance Corp. to cover rent for struggling businesses. They have called on the ruling coalition for a joint response.
The Japanese parliament recently passed a supplementary budget for fiscal 2020 to help ease the effect of the coronavirus. One of its features was up to 2 million yen in assistance for smaller companies and 1 million yen for individually owned businesses that have seen sales halved over the outbreak.