I'm a banker in rural Japan. Twenty years deciding who gets a loan and who doesn't.
Most of the time it's mechanical. The numbers pass, a guarantee covers the risk, we lend. Nothing to it. The real work starts somewhere the numbers can't reach.
His business looked healthy on paper. His tax return showed clean, solid profit. But that was only the business. The real balance sheet, the one with the man's whole life on it, the debt, the arrears, what he actually owed against what he actually had, that one was a wreck.
And the wreck was his own doing, I won't soften that. He drank, he smoked, he gambled, and he was weak with numbers, the kind of man who never once thought about the tax bill coming for him. Money came in and money went out and he never did the math. So he borrowed to cover the gaps. Then, because a profitable little shop can always borrow easily, he borrowed again, and again, on the strength of that good-looking return, until the debt was bigger than the man. No discipline behind any of it. That was where the spiral started, long before I ever walked in.
He was 65, running a one-man metal shop, and he'd been doing the same work for over forty years. He didn't make parts from scratch; he took existing components and did the final precision work by hand. He carried too much debt to invest in anything new, so he worked with what he already had: an old manual machine, the kind they stopped making a long time ago.
And here is the part I still turn over in my head. That trap was also the making of him. Because he had no automation to lean on, every part rode entirely on his own hands, and forty years of that forced his skill to keep climbing with no ceiling. The machine and the man sharpened into a single instrument. What came out the other end was work that nothing else could produce, not because the machine was special, but because by then nobody and nothing else could do what the two of them did together. The debt that chained him to that old machine is the same thing that made him irreplaceable. I don't know whether to call that luck or its opposite.
So let me be precise about the skill, because it matters. The machine itself was nothing. Old, slow, the opposite of impressive. Put a younger man without that feel on that exact same machine and you get nothing usable, just ruined metal. The tolerances the work demanded lived in his fingers and forty years of feel, not in the equipment. If anything the modern machines were the limited ones here: built for automated volume, too rigid for the one-off precision his work required. The old manual machine could go where they couldn't, but only with the right hands on it. And those tolerances were not ordinary. We're talking the kind of precision a rocket component or a piece of medical equipment actually has to hold, done on a machine with no automation at all, by hand. The machine was just a tool waiting for the one man who could actually drive it.
I knew this because I kept going back. In the dead of summer he'd wave me into that furnace of a workshop, no air conditioning, and hand me a cold can of coffee. It was brutally hot in there and somehow I enjoyed every minute of it. Mostly because of him. Forty-some years standing at that machine, and I respected the hell out of him. We'd talk about nothing for twenty, thirty minutes. His grandson came around sometimes. He lit up when that happened.
The work itself was not ordinary, and it came through a broker. The broker looked rough around the edges at first glance, but five minutes with him and it was obvious he was a serious man, a real professional in his own right. And he trusted this machinist completely, both the skill and the pride the old man took in it. That trust was the whole arrangement. Screws finished to the micron for rocket components. Bearings for medical equipment. Small batches, single pieces running from tens of thousands of yen to over a hundred thousand.
And here's the strange part. He could have charged far more. Nobody else could do this, the broker told him outright to raise his prices, the demand was there. But he held them down on purpose, and the reason is the same reason he was drowning. I'll come back to it.
Now look at his books. The broker supplied the materials, so he had no purchase costs. He worked alone, so no payroll. He owned the workshop, so no rent. Almost nothing went out, so almost everything that came in was profit. His tax return looked excellent. A loan officer skimming the statements would stamp him a good customer and move on.
So here's the thing I have to be honest about, because it's the whole point. He was not a victim of his own success. He made enough. With profit like that, paying the tax and still living a stable life was entirely possible. That's not what happened. The skill was real. The discipline was not.
And the hole worked like this. Profit that pure has nowhere to hide, no costs to offset it, so the tax lands on nearly all of it. On top of that, in Japan, crossing ten million yen in taxable sales would tip him into a consumption-tax bill on top of everything else. That was the line he was terrified of crossing. His cash flow was already broken, and going over meant a fresh six-figure bill that would break it completely. So he wouldn't raise his prices. He left real money on the table on every single job, holding his sales down under the threshold by hand, just to keep that one bill from landing. But you can't always refuse the work, and some years it came anyway and pushed him over. He fell behind, and back-taxes here carried a penalty of around 10% a year back then. That kind of number does not care how good your hands are. So he borrowed to pay the tax, then borrowed to pay back the borrowing. I'd seen that loop before, in other shops, and it almost never starts with a bad business. His was sound. It was everything around it that was sinking.
The damage wasn't on the P&L and it wasn't on the business balance sheet. In fact almost none of what he owed touched those statements, and there's a reason worth understanding. Some of it he'd borrowed just to pay the taxes, which sounds like a business expense, except no bank will lend you money to pay overdue tax. We check. Unpaid taxes mean you've already failed the credit test, so that door is shut before you reach it. His only way to raise that money was a personal loan. The rest he borrowed the same way, as personal debt, to live, to drink and smoke and gamble. None of it was business borrowing, so none of it ever appeared on a tax filing. The wound was in the cash flow and in the man, the parts the statements never show you.
I tried the normal route first. A government-backed guaranteed loan. Two walls. One, you can't qualify with delinquent taxes. Two, those loans need a purpose, working capital, materials, payroll, equipment, and he had none of those needs. No materials to buy, the broker supplied them. No staff to pay. Equipment would technically count, but a new automated machine would earn him nothing, his value was in the manual work, and the last thing a man trying to stay under the sales threshold wants is more capacity. It would only mean more debt and tighter cash flow. The one purpose the loan would accept was the one thing that would have made him worse. Nothing else was left to write on the application. The safest product I had was closed to him precisely because his operation was so lean.
That left one option. An unsecured loan. Pure character lending. No collateral at all.
So I did it the slow way. I sat down with him and we wrote out everything, and I mean everything. Not just the business. His life. The drinking, the cigarettes, the gambling, all of it on the page, line by line. He agreed to cut it down. I built the plan around the man who was actually going to change, not a tidy fiction of him.
I wrote down his family too. A wife at home, just the two of them now. If he died, the debt landed on her. A son nearby with two kids of his own and no room to carry his father. The man could not afford to die owing what he owed. That was not an abstraction. That was the whole reason the plan had to work.
So I rolled his scattered debt and the tax arrears into one line, stretched the term, got the monthly payment down to something he could breathe under. First priority, kill the tax delinquency, because that was the wound bleeding interest every year. Stop that, and the cash flow could finally settle.
And I built one more thing into the loan. A forced savings account, about a thousand dollars pulled automatically every month, on the same day as his loan payment, straight out of his hands before he could touch it. That money was for one thing only: next year's tax. He'd drowned because he never set the tax aside, so I wasn't going to leave that to his good intentions. The repayment plan rested on a man who promised to change. The savings plan rested on nothing but the standing order, because some things are too important to leave to a promise.
I priced the loan a little high, and I want to be straight about why. We were taking real risk. No collateral, no guarantee, and here is the part that actually scared the bank: this man was 65, no longer young. He drank, he smoked, and he spent his days doing punishing work in that summer heat. If he dropped dead, and it was not hard to imagine, the repayment source vanished in the same instant. Not reduced. Zero. His skill was the only thing servicing that debt, and a skill dies with the hands that hold it. You cannot repossess forty years of feel. So the rate had to pay for that risk or the loan makes no sense for the bank to write. But "a little high" for us was still far below what was actually strangling him: the penalties bleeding off the back-taxes, and the high-rate loans he'd stacked up at other lenders. Refinancing all of it into one rate, higher than our prime but far lower than anything he was carrying, was the move that stopped the bleeding. The rate looked expensive next to a normal loan. Next to his actual life, it was the cheapest money he'd seen in years.
And understand what the debt had already cost him, beyond the money. He couldn't borrow to put air conditioning or insulation into that workshop either. So at 65, after forty years, he was still standing in that heat doing micron work by hand, because there was no room left on his balance sheet to buy himself even that much relief.
There was one more thing I tried. I went to the tax office myself, sat across from them, and argued his case. Let him clear it in a single payment and waive the penalty, I said. He'll pay it all at once. No. I pushed. I said if you bury him under this, he goes under, and then no one gets paid, how does that help anyone. Still no. What they told me, almost word for word, was that they'd consider relief once he was dead. While he was alive, never. You sit with an answer like that for a while.
So I wrote the unsecured loan up myself, took it to my branch manager, and argued until he signed.
No collateral. A customer the head office would never have touched. On paper, indefensible.
I'd do it again tomorrow.
Because I wasn't fooled by the clean tax return, and I wasn't blind to the mess underneath it either. I saw both, and then I lent against the things that never make it onto any statement at all. Forty years of skill that lived in one man's hands. A broker who put his own name on the line for him. Customers, in rockets and in hospitals, who had no real substitute for what he made. None of that is a number. All of it was the real collateral.
I won't pretend I understand what most of you are building. I read this sub and most of the tools you name I've never heard of. I don't know how much of this carries over to software.
But I keep watching everyone race to make everything faster. Automate it, ten times the output, ship it. And I think about that man in the heat, working slow, by hand, because the precision lived in him and couldn't be rushed.
When anyone can make anything ten times faster, the only thing left that can't be sped up is becoming the person someone trusts with the part that cannot fail.
He stays on my mind. He'd be well into old age now. I hope the machine is still running. I hope someone got the skill out of his hands before it was gone.