Financial credit means that people can borrow money from a bank without any guarantee. The debtor can get the loan depending on his good credibility without offering some collateral or the guarantee from the third party. It is the main way for Chinese banks to lend money. Therefore, how to deal with the financial credit and what conditions should the people be qualified?
The basic conditions of Dealing with Financial Credit in China
1. The credibility grade of enterprise should be over AA-(including) and the enterprise should be examined and approved by national commercial bank provincial branch.
2. Enterprises should maintain a sustainable growth in total profit for 3 years and the asset-liability ratio should be controlled in 60%, with a steady and sufficient cash flow.
3. Enterprises should promise that they would never be the guarantor of other enterprises. If they have to, they must get the agreement of loan bank.
4. Enterprises should have a good management system and no bad record on their credibility.
The Process of Dealing with Financial Credit
1. Enterprises should offer a written application, covering the basic operation conditions, the type of financial credit, amount, deadline, function, secure method, repayment source and repayment method.
2. The related credit department receives the application and do some research about the enterprises’ basic information and operation conditions and evaluate whether they are qualified with the basic conditions of dealing with financial credit. If they are, the credit department will advice enterprises to bring related materials.
3. The related materials include application for financial credit, borrower’s basic information, qualification, loan note and letter of authorization, late 3 years’ financial statements and report approved by relative authorization, approval document of higher authorities of borrower, proposals for the project, feasibility study report, approval document of relative authorization, instruction of payment and repayment, business contract related to the loan and other materials that loan bank needs.