What is the repayment of the loan, why should we promote it
The so-called repayment of loans is based on the fact that before the loan expires, the bank supports the eligible small and micro enterprises to automatically renew or extend the loan term based on the historical data and behavioral assessment of the corporate customers. In the past, after a corporate loan expired, it was necessary to repay the loan before refinancing.
The renewed loan was not the first in Dezhou, Shandong. As early as 2014, the former CBRC required the bank to innovate its service model. After the loan expires, there is still financing demand, but small and micro enterprises with temporary financial difficulties may meet the five conditions of normal production and operation, good financial status, repayment ability and strong willingness to repay, and they will apply for banking finance. The institution may conduct loan investigation and review in advance according to the requirements of the newly issued loan. After the examination is passed, the loan can be renewed.
Allowing no repayment of loans, mainly to solve the problem of financing difficulties for SME financing. According to Wang Jian, chief analyst of Guoxin Securities Banking, because the average life expectancy of SMEs in China is only 3 years, banks generally do not dare to give them medium and long-term loans (that is, loans with a maturity of more than one year), and only short-term loans will be issued. .
In reality, the funds invested by a company cannot be recovered within one year. For example, the purchase of factories and machinery is a fixed asset investment with a long payback period. Short-term loans have expired, funds are still frozen in fixed assets, and what loans are returned?
As a result, the bridge loan appeared - the SMEs first raised a sum of money, and even borrowed private loan sharks, first bank loans, and new short-term loans, and then private lending.
Cross-bridge loans have increased the financing costs of small and micro enterprises. Even small and micro enterprises have borrowed high-interest bridge loans, bank loans are not timely, and finally fell into financial crisis, and they died.
According to the regulations of the former CBRC, borrowing new loans (using new loans and old loans), or loans that need to be repaid through other financing methods, should be included in the concern loans. The allocation of interest-related loans will have two negative impacts on commercial banks. First, the proportion of normal loans will decline, affecting the image of banks; second, paying attention to class loans should increase the special provision by 2% and increase bank costs. Therefore, in general, commercial banks will not borrow new and old ones for SMEs.
Although the renewed loan is essentially borrowed from the new one, it has been recognized and encouraged by the regulatory authorities because it solves the cost and risk of the company’s bridge loan. There is no need to downgrade the loan rating to a concern loan.