What Are the Different Types of Commercial Bank Loans?

The type of bank loan refers to the form of loan. According to the "General Principles of Loans", the current forms of loans issued by China's commercial banks are: entrusted loans, credit loans, mortgage loans and discounted bills. At the same time, various commercial banks have actively carried out financial innovations in response to the market and introduced many loan types that meet the needs of SMEs.

Types of bank loans

Right!

The type of bank loan refers to the form of loan. According to the "General Principles of Loans", the current forms of loans issued by China's commercial banks are: entrusted loans, credit loans, mortgage loans and discounted bills. At the same time, various commercial banks have actively launched financial innovations in response to the market, and have introduced many loan types that meet the needs of SMEs.

Chinese name

Types of bank loans

Foreign name

Bank loan category

Types of

classification

Affiliation

Bank loan

Including

Short-term loans, medium-term loans, long-term loans, etc.

1. Entrusted Loan

   Entrusted loans refer to funds provided by clients, such as government departments, enterprises, institutions, and individuals. The lender (that is, the trustee) issues, supervises, and assists on behalf of the loan object, purpose, amount, term, and interest rate determined by the client Recovered loan. The lender (trustee) only charges a handling fee and does not bear the risk of the loan.

   The basic procedures for handling personal entrusted loans are:

   First, the client submits an application for lending to the bank.

   The second is that the bank selects and matches according to the conditions and requirements of the two parties, and recommends them to the client and the borrower.

   Third, the client and the borrower met directly to negotiate and make decisions on specific matters and details such as the amount of borrowing, interest rates, loan terms, and repayment methods.

   Fourth, after the borrowers and lenders have negotiated the required conditions, they go to the bank together and sign a commission agreement with the bank.

   Fifth, the bank investigates the credit status and repayment ability of the lender and issues an investigation report, and then the borrower and the borrower sign a loan contract and issue the loan after approval by the bank.

2. 2

   Credit Loans

   Credit loans are loans made in the creditworthiness of the borrower. Its characteristic is that the debtor can obtain the loan on its own creditworthiness without providing collateral or third-party guarantees, and the borrower's credit level is used as the repayment guarantee. This type of credit loan has long been the main way of lending by Chinese banks. Because this kind of loan method is relatively risky, it is generally necessary to conduct a detailed inspection of the borrower's economic efficiency, management level, and development prospects to reduce the risk.

   From the actual point of view, the basic conditions for banks to issue credit loans are:

   First, if the customer's credit rating is at least AA- (inclusive) or above, a credit loan can be issued upon approval by the provincial branch of a state-owned commercial bank;

   Second, the total operating income accounting profit has continued to increase in the past three years, the asset-liability ratio is controlled within a good range of 60%, and cash flow is sufficient and stable;

   Third, the company promises not to use its effective operating assets to set up a collateral (pledge) to others or provide external guarantees, or to obtain the loan bank's consent before applying for a collateral (pledge), etc. and providing external guarantees;

   The fourth is the standardization of business operation and management, and there is no bad credit record of evading debts and owing interest.

3. 3

   Secured loan

   Guaranteed loans refer to guaranteed loans, mortgage loans, and pledged loans.

   Pledge of rights refers to the draft, check, promissory note, bond, deposit certificate, warehouse receipt, bill of lading; shares and stocks that can be transferred according to law; exclusive rights to the trademark, patent, and authorship that can be transferred according to law; Other rights of pledge.

   Compared with mortgage, the biggest feature of pledge is that the pledge must be transferred to the bank for possession.

4. 4

   Discounted bills

   Discounted bills refer to the transfer of unexpired commercial bills (bank acceptance bills or commercial acceptance bills) to the bank by the borrower to obtain funds after deducting discounted interest. As the saying goes, the killer business is done by someone, and the loss-making business is not done. Discounting bills is of course profitable. When a bank accepts a bill from a company, it discounts the original price, which is called discounting.

5. 5

   Comprehensive Credit

   That is to say, for some companies with good operating conditions and reliable credit, the bank grants a certain amount of credit line for a certain period of time, and the company can recycle it within the validity period and the range of the line. The comprehensive credit line shall be submitted by the enterprise for one-off application and approved by the bank. Banks using this method to provide loans are generally for enterprises with industrial and commercial registration, qualified annual inspections, well-managed, credible, and long-term cooperative relationships with banks.

6. 6

   Credit guarantee loan

   At present, more than 100 cities in 3l provinces and cities nationwide have established credit guarantee institutions for SMEs. Most of these organizations implement the form of membership management and belong to public service, industry self-discipline, and non-profit organizations of their own. The source of the guarantee fund is generally composed of the local government's financial appropriation, the membership fund voluntarily paid by members, the funds raised by the society, and the funds of commercial banks. When member companies borrow from banks, they can be guaranteed by SME guarantee institutions.

7. 7

   Buyer loan

   If the company's products have a reliable market, but in the case of insufficient capital, poor financial management foundation, collateral that can be provided or difficulty in seeking third-party guarantees, the bank can purchase the products from the buyer according to the sales contract. Provide loan support. The seller can charge the buyer a certain percentage of advance payment to solve the financial difficulties in the production process. Alternatively, the buyer issues a bank acceptance bill, and the seller holds the bill to the bank for discounting.

8. 8

   Off-site joint collaboration loan

   Some small and medium-sized enterprises sell their products very widely, or provide supporting parts for some large enterprises, or loose-type subsidiaries of enterprise groups. In the process of producing collaborative products, supplementary production funds are needed. A sponsoring bank can be sought to provide a unified loan to the group company. Then the group company provides the necessary funds to the cooperative enterprise, and the local bank cooperates in contract supervision. The lead bank can also be combined with the account opening bank of the cooperative enterprise in a different place to provide loans separately.

9. Project development loan

   If some high-tech small and medium-sized enterprises have significant value in the transformation of scientific and technological achievements, the initial investment amount is relatively large, and the enterprise's own capital is unbearable, and they can apply to the bank for project development loans. For high-tech SMEs that have established stable project development relationships with institutions of higher learning and scientific research institutions or have their own research departments, in addition to providing working capital loans, banks can also apply for project development loans.

10. Foreign exchange earning loan

    For enterprises producing export products, banks can provide package loans based on export contracts or credit visas provided by importers. For enterprises with cash exchange accounts, foreign exchange mortgage loans can be provided. For enterprises with foreign exchange income sources, RMB loans can be obtained on the basis of foreign exchange settlement certificates. For enterprises with promising export prospects, they can also borrow a certain amount of technology transformation loans.

11. Natural person secured loan

    In August 2002, the Industrial and Commercial Bank of China took the lead in launching the secured loan business for natural persons. In the future, when ICBC's domestic institutions handle credit business with SMEs within 3 years, the natural persons can provide property guarantees and assume compensation liabilities. Natural person guarantees can take the form of mortgage, pledge of rights, mortgage plus guarantee. Property that can be mortgaged includes personally owned property, land use rights, and transportation. Personal property that can be pledged includes certificates of deposit, certificates of government bonds and registered financial bonds.

12. Personal entrusted loan

    Commercial banks such as China Construction Bank, Minsheng Bank, and CITIC Industrial Bank have successively introduced a new type of SME financing business-personal entrusted loans. That is, a loan entrusted by an individual to be issued, supervised, used, and assisted in recovery by a commercial bank based on the loan object, purpose, amount, term, and interest rate determined by the client.

13. Intangible assets secured loans

    In accordance with the relevant provisions of the "Guarantee Law of the People's Republic of China", intangible assets such as exclusive trademark rights, patent rights, and property rights in authorship rights that can be transferred according to law can be used as loan collateral. That is, loans obtained by using legally transferable intangible assets such as trademark rights, patent rights, and authorship rights as collateral.

14. Export tax refund pledge loan

    The export tax rebate pledge loan is formed by the normal export of the enterprise, and the loan issued by the national tax department for the pledge of the unrefundable tax refund. Many commercial banks in southern Jiangsu and Zhejiang have launched export tax rebate pledge loans for the good security of export tax rebates.

15. Security warehouse business

    The security warehouse business is a loan issued by the company's relatively common current assets as collateral. The specific operation method is as follows: When an enterprise requests a loan, the bank requires it to deposit the goods in a designated warehouse (an agreement with the bank), act as collateral, and then issue a loan to it based on its market value to determine a discount rate. When the company needs to pick up the goods for sale, it must have new goods to supplement or return the loan to the loan, and then pick up the goods with the bank's official seal stamped from the warehouse. This not only solves the problem of difficult loan guarantees for small and medium-sized enterprises, but also promotes commodity circulation.

16. Accounts receivable pledged or acquired

    The existence of accounts receivable affects the turnover of funds and is not conducive to the development of enterprises, especially small and medium-sized enterprises.

17. Insurance agency business

    The insurance agency business is referred to as factoring, which is the short-term receivables claims generated by the bank's purchase of the supply company due to credit sales. The loan is paid in advance by the bank to the seller's enterprise: the bank then acts as the creditor's agent and then collects the buyer's enterprise. Although the loan subject of this business is the same as the account receivables pledge business, there is a difference between the two methods in the treatment of claims and debts.

18. Self-service loan

    Self-service loan is to simplify the traditional pledge or mortgage loan procedures. Small and medium-sized enterprises can pledge (mortgage) once and use it repeatedly. It can be divided into two forms-deposit certificate pledge and real estate mortgage. By evaluating the pledge and collateral of SMEs in the bank, the bank grants certain credit lines to SMEs, and within the agreed period, SMEs can repeatedly carry out loan repayment business according to the credit lines. As long as it is repaid in a timely manner and has no bad records, the bank will automatically restore the original credit limit of SMEs after repayment, so that there is no need to re-apply for the next loan.

    END

• In addition to the above-mentioned loan forms, in addition to entrusted loans, the bank shall issue loans, and the borrower shall provide guarantee. The loan bank shall conduct a strict review of the repayment ability of the guarantor, the ownership and value of the collateral and pledge, and the feasibility of realizing the mortgage and pledge.

• After review and evaluation, if it is confirmed that the borrowing enterprise or natural person has good credit and can indeed repay the loan, the loan may not be provided with guarantee.