Rebirth of the Industrial Tycoon

Chapter 600 Finding a Loan

Financing private enterprises has always been a problem, and getting a loan from a bank has always been very difficult.

It is also because of the difficulty of financing that most private enterprises will choose to go public after reaching a certain scale to solve the problem of corporate financing.

Of course, there are also capitalists who go purely for the purpose of collecting money. This kind of people can no longer be regarded as entrepreneurs. Real entrepreneurs will not raise funds just for collecting money.

In the early 1990s, banks were asking for loans from others. In that era, the loan interest rate was as high as 10 percent, which was simply legal usury. Naturally, banks rushed to borrow money.

Also in the process of enterprise reform in the 1990s, too many enterprises went bankrupt, which also caused a large number of bad debts to be repaid by banks. Therefore, banks' loans to enterprises have gradually become stricter.

Especially after banks start to commercialize, they pay more attention to economic benefits. Every loan is a business, and they must pay attention to profitability. This has also exacerbated the difficulties of private enterprises getting loans.

The financial industry is doomed to hate the poor and love the rich. The more funds are lacking and companies that need loans, the more reluctant banks are to lend.

In fact, when financial institutions grant loans, the first consideration is the safety of capital, and the second is profitability.

Security is easier to understand, that is, is the money safe for you? When lending money to others, the first thing to consider is whether the money will be wasted.

If the borrower is an enterprise, then the financial institution has the opportunity to evaluate a series of factors such as the industry, market, competition, operation, management, technology, etc. to which the enterprise belongs. To put it bluntly, it means whether you have the ability to repay the loan.

However, many private enterprises, especially small and medium-sized private enterprises, have irregular management, backward technology, insufficient corporate credit, and very limited assets. Banks are naturally unwilling to lend.

In addition, the cash flow of the enterprise is also a major factor considered by the bank. After all, cash flow is the first source of bank repayment.

However, the financial statements of small and medium-sized enterprises are usually not audited by professional accounting firms, and there are many cases of smuggled accounts, with incomplete and untrue accounts, which are of little reference value to banks.

The bank can't verify the authenticity of the information provided by the company, so it can't judge the real business situation of the company, so it simply chooses not to lend money for the safety of funds.

I would rather make less money than do business at a loss!

It is also because loans are more difficult and loan interest is high, so Li Weidong's enterprises hardly seek bank loans during the expansion process, but mainly use their own cash flow.

As for the electrical appliance factory, it is mainly engaged in the OEM of home appliances, which is a labor-intensive industry. In fact, it is only responsible for production, not sales. Although it is hard money, it does not need to bear market risks.

Regardless of whether the product can be sold or not, I will earn the processing fee first. This is a characteristic of OEM companies. They only need a relatively large amount of capital when building a factory. Once the production is on track, the cash flow will be relatively healthy, and there is not much demand for bank loans.

Puppy Electric Company made some money in the past few years by relying on high-margin products such as soybean milk machines and microwave ovens. Later, Li Weidong launched a price war, and the prices of Puppy Electric's products were greatly reduced, and the profits of this part were diluted.

Fortunately, Puppy Electric successfully entered the Japanese market, and gained huge profits by selling beauty products, and the cash flow has always been relatively healthy.

Puppy Health originally started by selling health care products. Health care products are real profits, and Puppy Health is even richer. If you count carefully, Puppy Health has been Li Weidong’s biggest source of income in the past ten years.

The benefit of Fukang Project has also maintained steady growth, thanks to the country’s continuous investment in assumptions, and recently won a large order from India. The company’s cash flow is very abundant, enough to buy another piece of land to build a new factory area up.

As for Fukang Agricultural Machinery, in the past few years, it has made a lot of profits by relying on the product of agricultural tricycles. In the past two years, it has maintained good performance by relying on the sale of cotton harvesters.

Moreover, Fukang Engineering and Fukang Agricultural Machinery are both traditional machinery manufacturing enterprises. As long as the enterprises of this type are operating normally, as long as they do not start major projects in Malaysia, they will not need financing.

The manufacturing industries that Li Weidong is engaged in have a relatively healthy financial situation, and there is no need to seek bank loans.

But wholesale malls are different. Wholesale malls are not manufacturing, but business-related. To be precise, they are commercial real estate.

Commercial real estate is also real estate. In the real estate industry, instead of going to the bank for a loan, you get real money yourself. Isn’t that silly?

If Li Weidong's wholesale mall wants to continue to expand, it must solve the problem of loans.

President Wu brewed a good Pu'er, poured tea for Li Weidong himself, and said at the same time: Chairman Li, it's not that I don't want to get a loan, but it's really difficult for companies to get loans now.

You also know that many companies went bankrupt in the past few years, and the loans issued by our bank were also in vain, which only brought us huge losses. Therefore, the loan has been generally tightened in the past two years, and the review process has been comparatively difficult. strict.

Take our bank for example, but any loan exceeding 3 million must be reported to the provincial bank, and if it exceeds 10 million, it must be reported to the head office in Beijing. The loan amount you want must not only be reported, but also approved by the head office.

Li Weidong took a sip from his teacup, and then said: President Wu, as far as I know, it's easy to get a loan from a state-owned enterprise, right? I won't talk about other companies. The transportation company will build a new bus station, and the loan will be approved immediately. up!

To put it bluntly, the efficiency of transportation companies in recent years has not been very good. They have sold all their cars to individuals, and contracted out all passenger lines. They only earn some income by collecting contract management fees.

After all, the transportation company is a state-owned enterprise, so the state is behind it. And the new bus station project is also a key project planned by the city. It is considered a livelihood project, and we feel more at ease in lending money.

President Wu paused, and then said: Chairman Li, the wholesale mall you want to build is a commercial project after all, and it is risky, and the amount of funds is so large, the possibility of approval by the head office is not great.

Then I'll take out a mortgage, so how about the head office! Li Weidong asked.

If there is a mortgage, I can try to persuade the leaders of the head office. President Wu continued to ask; Chairman Li, what do you plan to use as collateral? It was agreed in advance that we will not accept mortgages for machinery, equipment and goods.

In the past, banks were willing to accept mortgages for machinery, equipment and goods. Especially in the 1990s, many companies mortgaged their production equipment and products to banks to obtain loans in order to obtain funds.

However, the depreciation rate of machinery and equipment is too fast. What's more, the machinery and equipment mortgaged by many companies are already relatively old. They will not pay the money in the future, and the machinery and equipment recovered by the bank can only be sold as scrap iron. .

The same is true for the mortgage of goods. Many companies lack funds. In the final analysis, the products they produce are relatively old and cannot meet the market demand. If the products cannot be sold, the companies will naturally be short of money.

Enterprises themselves have no way to sell these products, so how can banks find a market? So even if this kind of collateral falls into the hands of the bank, it is almost like distribution.

In this way, whether it is using machinery and equipment as collateral or goods as collateral, the bank will lose money.

The bank also knows that the disposal of machinery, equipment and goods is too troublesome, and the cost cannot be recovered, so they simply do not accept machinery, equipment and goods as mortgages.

Li Weidong is very clear about the doorway here, so he said; I can use the land and real estate of the wholesale mall as collateral.

President Wu frowned slightly, and then said, Chairman Li, I remember that the textile wholesale mall has been mortgaged, and you are building the small home appliance wholesale mall, isn't it built with that loan?

The small home appliance wholesale mall has been built. I can use this small home appliance wholesale mall as collateral to apply for a loan. Li Weidong said.

I'm afraid it will be difficult. President Wu continued: At the beginning we were willing to accept the textile wholesale mall as a mortgage, mainly because the textile wholesale mall was successfully opened, and the rent and management fees you collected could repay the loan.

But now the small home appliance wholesale mall has not yet opened, and we don't know if this project can make money. If the project is not successful, it can only be regarded as a useless empty building, worthless.

Even if the small home appliance mall can't be built, don't we still have land! Li Weidong said, but as soon as the words came out, he immediately realized that this was 2000, not twenty years later, and the land was worthless.

Sure enough, President Wu said: The land is not worth a lot of money, and the money you get is very limited.

For future generations, housing mortgages will be about 30% off, shops will be 40% off, factory buildings and land use rights will be 50% off, and school district houses and popular shops will have a higher mortgage rate.

However, in 2000, housing prices had not risen, and the mortgage discount of real estate was much lower than in the future; the price of land was even more cheap, and the mortgage could not cost much.

Li Weidong thought for a moment and said, Well, I can use the company's shares as collateral to apply for a loan.

The shares of Fukang Factory or Fukang Agricultural Machinery may be possible, but the shares of the mall management company are definitely not.

President Wu went on to explain: At present, the profit of the mall management company mainly depends on the rent of the textile wholesale market, but the textile wholesale market has already been mortgaged, which is equivalent to a mortgage. After two mortgages, the head office must pass But.

Li Weidong frowned. The shares of Fukang Engineering and Fukang Agricultural Machinery will be of great use to Li Weidong in the future.

At least two companies have the possibility of listing, so the equity must be clear and clear. If it is used as collateral, it may be troublesome for the approval of the China Securities Regulatory Commission when it is listed.

President Wu went on to say: In fact, even if you use the shares of Fukang Engineering or Fukang Agricultural Machinery as a pledge, it will take a long time for review. After all, you are not a listed company. The head office has to review your financial statements and only dare to lend if you meet the conditions. .”

Using shares to borrow money from a bank is a type of pledge loan, and the most pledged loans made by banks are also stock pledges.

However, the stocks of listed companies are often used for stock pledge, because the stocks of listed companies have an actual price, and the financial report is relatively transparent, so the bank can clearly understand the company's situation.

If it is not a listed company, it is more troublesome to pledge shares. The bank has to evaluate the value of the shares and check the company's financial reports. It must be a company with relatively good profitability before granting loans.

As for the shares of small and medium-sized enterprises, they are usually insulated from mortgage loans.

The lending time is too long, and it will delay things. Li Weidong directly found an excuse to refuse.

Then I have nothing else to do. President Wu spread his hands.

Li Weidong pondered for a moment, and then asked, President Wu, if I apply for a real estate development loan, is there a high chance that I will be approved?

Well... President Wu frowned and thought for a while, then said; I really don't know about this, because I have never done this kind of business here.

As far as I know, the companies currently applying for real estate development loans are all real estate companies in big cities or southern coastal areas, especially in the Pearl River Delta.

In a small place like Qinghe, we don't have a decent real estate developer, and no one has applied for such a thing, so I don't know if you will be successful if you apply.

Li Weidong said: I also know that it is difficult to apply for a real estate development loan, but it depends on the cost. I still want to give it a try, so I will leave the process to President Wu. As for other aspects, I will find a way!

Real estate development loans refer to project loans issued to real estate development enterprises for housing, commercial housing and other real estate construction, and the loan period generally does not exceed three years.

If a real estate development company wants to obtain this kind of loan, it must first obtain the land use right of the loan project, planning and investment permit, construction permit, construction permit, etc., and a pre-sale permit for commercial housing.

The project must also conform to the declared purpose and function, the project budget and construction plan must comply with laws and regulations, and the investor must invest at least 30% of the project funds in advance, so that the remaining 70% can be borrowed from the bank.

Many people in later generations say that real estate developers use bank money to build houses, which actually refers to this real estate development loan.

Because this loan as long as the project is compliant, the documents are complete, and then you invest 30% of the funds, you can get a loan, which is similar to a credit loan.

In addition, real estate has a pre-sale policy, and real estate development companies can sell houses in advance to withdraw funds. The actual investment is actually less than 30%. Therefore, some people say that developing real estate is empty-handed.

And the real empty-handed white wolf is the one who holds a floor plan and points to a vacant lot to conduct pre-sales in violation of regulations.

Wait until the advance payment reaches 30, and then take this money to the bank to apply for a real estate development loan to complete the entire project. In this way, you don’t need to pay a single penny, and you will be 100% borrowing chickens to lay eggs.

In the past, the funds of the so-called real estate companies broke down, resulting in unfinished buildings, which happened in all likelihood.

The real estate company first draws up a plan, or digs a foundation, or even starts construction of the house, just to receive an advance payment.

Sometimes the prepayment is less than 30, or the project does not match the declaration, and the real estate development loan cannot be approved, the capital chain will naturally be broken, and then the house will be unfinished! The developer took all the rest of the money and ran away, and the losers were those who paid the house in advance.

That's why the relevant departments will keep reminding that when buying a house, you must look for the so-called complete five certificates. This is not only related to issues such as obtaining a real estate certificate later, but also because only projects with these five complete certificates can apply for real estate development loans. The funding chain of this project is guaranteed.

Before 2003, it was relatively difficult to apply for real estate development loans.

One reason is that the banks at that time were still in the stage of commercial transformation, and they were more cautious about lending. It was not until 2004 when the State Council launched the shareholding reform of state-owned banks that it began to improve.

The more important reason is the factor of national policy. Until June 2003, the central bank's Notice on Further Strengthening the Management of Real Estate Credit Business was still controlling real estate development loans. Now that the country is in control, banks will naturally not lend money easily.

Until August 2003, the State Council promulgated the Notice on Promoting the Sustainable and Healthy Development of the Real Estate Market, which is the famous No. 18 document in the real estate industry, requiring continuing to increase credit support for qualified real estate development companies and real estate projects. .

Since then, credit for real estate development has been gradually liberalized. With the support of bank credit, Chinese real estate companies have also officially embarked on the road to rise.

In 2000, due to various restrictions, probably only real estate companies with a relatively deep background and a strong relationship had the opportunity to obtain this real estate development loan. Ordinary real estate companies, even if they are qualified, have difficulty applying for real estate development loans.

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