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Standard Definition
The fixed asset loan is a medium or long-term RMB
or foreign currency loan made to the borrower for the construction,
purchase or upgrading of fixed assets projects or supporting facilities.
Overview
A business or non-profit registered with the industrial
and commercial administration may apply for a fixed asset loan when
building plants, purchasing equipment or investing in other fixed
assets. The borrower must meet the requirements
of the “Loan General Principles” and those of the bank. Its projects must meet the following requirements:
compliance with industrial policies and the bank’s credit policies;
a capital ratio of at least 20%; definite sources of guaranteed
supporting funds; advanced and adaptable technology and equipment;
reliable sources of raw materials, fuel and energy, and compliance
with environmental standards; marketable products, competitiveness
and reasonable returns that supports repayment; project management
of green-field project.
Use
The loan is primarily used for the construction,
purchase and upgrading of fixed asset projects and supporting facilities.
Categories
The loan may be either a capital construction loan
or a technological renovation loan.
The capital construction loan is a medium or long-term
loan used for capital construction, whether major, large-scale,
medium or small projects.
The technological renovation loan is a medium or long-term
loan used for technological renovation, and may be either an upper-limit
or lower-limit loan.
Currencies and Terms
1. Currencies: The loan is offered in both the RMB
and foreign currencies.
2. Terms: For the capital construction loan, three
years maximum for small projects, eight years maximum for large
or medium projects, with the actual term determined according to
project evaluation. For the technological renovation loan,
generally five years for the upper-limit loan, six years maximum;
generally three years for the lower-limit loan, five years maximum;
with the actual term determined according to project evaluation.
Price
Set according to PBC or CCB regulations on loan interest.
Service Providers and Networks
The corporate services departments of CCB branches
market the loan. They
process applications, assess projects and provide customer services.
Client Process
１、Application
When the client files a loan application, it must
provide: its operations permit; institutional code certificate;
legal representative identification certificate; loan certificate;
financial statements and auditing reports verified by a treasury
department or a CPA firm for the previous three years and the previous
month (if the business is less than three years old, it must provide
all available financial statements); tax registration certificate;
corporate contract or charter; list of directors, executives, and
financial managers, and a sample of their signatures.
If the application is made by an authorized agent,
the original copy of the legal representative’s authorization letter
must be provided; if the client is a limited liability company,
joint-stock company, joint venture or contractor company, documents
that indicate the board of director’s or the contracting organization’s
consent to the application must be provided.
Guarantor-related Documents; the client must provide
background information on the project before applying for a “Statement
of Loan Intent.” Before
the client applies for a “Statement of Loan Commitment” and for
a loan, it must provide: a project feasibility study; project budget
information (original copy or photocopies); report on project preparation;
documentation of self-raised funds, of measures to raise capital
construction funds and operating funds not covered by the loan,
and of sources of funds already raised; other documents required
by CCB.
２、Sign the Contract
If CCB approves the loan, it will sign a loan agreement
and a guaranty agreement with the client. If the CCP does not approve the loan, it will notify the client
in a timely and definite fashion.
３、Guaranty
After signing the agreement, the borrower must provide
a third-party guarantor, mortgages or pledges. It may need to register the mortgage,
purchase insurance for the mortgaged property, or deposit the pledged
rights with the bank.
４、Loan Disbursement
When the client completes the above procedures, the
loan contract comes into effect.
The bank may disburse the loan to the borrower, who may withdraw
the loan amount for the uses specified in the contract.
５、Repayment. The
borrower must repay the loan on time.
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