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Start the New Engine of Mass Entrepreneurship and Innovation Industrial Bank (IB) Released Updated Version of “Start-up Loan” Around China

During the golden times of autumn, there are good news for small- and mini-sized enterprises. Based on the half-year experiences from pilot projects, IB has optimized “Start-up Loan” and officially launched its updated version around China.

Before that, IB has approved 35 million yuan with pilot projects under “Start-up Loan” in cities like Shanghai, Shenzhen, Guangzhou, Nanjing, Chongqing and Xiamen.

With the updated version, the loan threshold has been further reduced and approval procedure optimized, while the products can be used more flexibly. It also takes into account actual conditions in start-up stage for small- and mini-sized businesses, making it easy and reasonable in terms of loan period, use of funds and repayment method.

Chen Feng (alias), a person-in-charge of a Fujian technology company engaged in the production of environment friendly chemical products, has enjoyed the benefits of this generally preferential product ahead of time. Supported by IB's “Start-up Loan”, his company has signed purchase agreement with four large manufacturers. “Our partners are satisfied with our delivery timing and quality, and will list us as one of their long term suppliers”, he said.

Chen Feng used to be refused frequently for financing, but now he is very familiar with the features of “Start-up Loan”, such as low threshold, natural person guarantee with no need for other collaterals, credit extension of one year and maximum loan line of 1 million yuan.

“We received 1 million yuan credit loan without guarantee less than a week. Considering our production and operation conditions at the start-up stage, IB also provides us with Online Self-Service Circulating Loan for Small and Mini-sized Enterprises, which can be borrowed and repaid at any time, and favorable interests also help us to reduce financial expenses and repayment pressure in short term”, he said.

With the support of innovative financial products such as “Start-up Loan”, the enterprising dreams of Chen Feng and others have becoming reality gradually.

Break the Limitation on “Physical” Collaterals

Lacking of collaterals has been a core problem in financing for start-up small businesses for a long time.

“Collaterals were significant obstacles that hinder my loan application in the past.” Li Liang (alias) sighed with emotion when recalling his financing experiences.

Based in Nanjing, Li Liang's company is an auto parts manufacturer that founded shortly and specialized in precision manufacturing of auto spare parts. With the increasing partners and orders, his company was in urgent need of capital for production. It however was very hard to borrow money from banks without physical collaterals. “The market is full of opportunities, I really don't want to lose opportunities one after another just because of short of capital.” said Li Liang.

Unexpectedly, IB Nanjing Branch presented an “olive branch” to them. To see from IB Nanjing Branch, this business is a quality small and mini-sized enterprise: the company has just started with a promising industry prospective, and both the company and its projects boast sound growth opportunities and potentials; the business owner pays attention to integrity and have certain experiences and technology capabilities; a technical experts team is focusing on innovating manufacturing technique; the market demand is huge, and downstream clients are large businesses and famous groups; and their stable operation will create high returns.  IB's “Start-up Loan” can solve the problem of lacking physical collaterals, which makes Li Liang see the hope.

According to the financing characteristics of “light assets” entrepreneurs like Li Liang, IB's “Start-up Loan” has introduced “scorecard” as a standardized risk evaluation tool, thus breaking the traditional limit on physical collaterals. They determine the approval result with 2 rounds of scoring with scorecard centered on the feasibility of applicant's business plan and credibility of its entrepreneur team.

The person in charge of product design team of “Start-up Loan” said, “In the 1st round, account manager and risks manager score against due diligence results, and evaluate the credit standing of the business's actual controller, industry experiences, team and project profiles. In the 2nd round, a 3 person approval team consisting of person in charge of small-sized enterprises department, risk team leader and leader of specialized team for small-sized enterprises meets with applicant business owner, to evaluate their development potentials as the basis of loan grant.”

After full investigation and 2 rounds of scoring and evaluation, IB issued the first 0.6 million yuan loan to Li Liang's company. “I didn't expect we can receive loan from IB simply with our 'soft power' like our business mode, products and team.” said Li Liang. With the loan, his company can take more orders, introduce more technical talents and improve the technical features of its products, and predict a substantial increase of sales this year.

Through many cases, we found “Start-up Loan” not only solved the financing difficulties for small and mini-sized enterprises, but also reinforced their confidences in development.

“V Benefits for Entrepreneurs” Special Action Plan

More excited than Li Liang, is Wang Lei (alias), the person in charge of a Chongqing technology limited company, also a “light asset” small and mini-sized business. IB “V Benefits for Entrepreneurs” special action plan tailored a financial service program with “debt+equity” for Wang Lei's company, providing one-stop financial support including 0.5 million yuan “Start-up Loan”.

Released this August, IB's “V Benefits for Entrepreneurs” Plan focuses on high value and high growth small and mini-sized businesses, providing them with comprehensive, professional and quality financial services based on its professional management system and financial guidance experts team.The main products of the plan include “Start-up Loan”, “Easy & Fast Loan”, “Trade Loan” and “Consecutive Loan” and other special products for small and mini-sized business, assisted by the equity financing method under “Open Sesame” SME IPO Program and preferential exclusive settlement, payment and cash management program for small and mini-sized businesses. It combines “debt” and “equity” as well as “financing” and “knowledge leveraging” and centers on the operation features and financial needs of enterprises in their start-up and early and mid-term development.

Wang Lei considers IB's “V Benefits for Entrepreneurs” a good helper for enterprises in the long run. “It took only one week to approve the loan, which was really helpful and solved our cash flow problem. In the meantime, they also provide supporting financial service and enable us to grow vigorously.”

Two years ago, Wang Lei, once a scholar, came back to China with a bullish view of drones market. He founded a hi-tech company to conduct R&D, manufacturing, sales, repair and technical service related to drones and spare parts. It is a tough job to start business. Under Wang's leadership, his team has overcome numerous obstacles and gradually obtained core technologies, owned full independent IPs and obtained over 10 patents. The company's drone related R&D and manufacturing technology has gradually taken a leading position in the market.

However, the company's operation basically relied on its own capital, and after R&D and proper productions, they are in urgent need of capital. Based on comprehensive and deep understanding of their needs in financing and capital use, IB's “V Benefits for Entrepreneurs” team tailored a full financial service program for them timely, not only resolving their financing difficulties, but also providing them with comprehensive financial service based on their needs and characteristics. 

As introduced by Liu Lu, the GM of small and mini-sized businesses department, IB's Chongqing Branch, according to the need of Wang Lei’s company for direct financing channel, its expert team provided professional financial consulting service, created exchange platform for enterprises with the Bank's advantages in resources and services. They selected suitable investors for Wang Lei's start-up team based on their actual conditions, and helped them in financing planning and management consulting. “If Wang's business intends to apply for investment-connected loan or list at NEEQ, our bank's 'Open Sesame' product under 'V Benefits for Entrepreneurs' may also provide financial service accordingly.”

From start-up to mature, our bank can always provide proper financing support for enterprises in their various development stages.” said Li Taishun, GM of IB's Small Enterprise Department. During business's growth to pre-IPO, the Bank, as a financial advisor, will bring into full play the advantages of complete group licenses and interbank cooperation, provide comprehensive and professional re-financing service in capital market for quality small- and mini-sized businesses to enter into capital market and break through the development bottleneck, and offer one stop support in various areas such as capital and stock increase, tailored additional shares, listing at NEEQ and A-share IPO.