Recently, Industrial Bank’s Jinan branch offered 200 million yuan ($32.66 million) in unsecured lines of credit to Zhenghe Group. The company now has a total of 3 billion yuan in unsecured lines of credit from various banks, including China Construction Bank, Agricultural Bank of China, and Industrial and Commercial Bank of China.
Unescured lines of credit do not force borrowers to provide a guarantee or a third-party to get a credit extension. Companies can only be qualified if business credit, bank credit, tax affairs, debt rating, operation capacity, profitability, development ability and risk rating for three years pass certain requirements. Unsecured lines of credit show that the company has a strong credit rating, reliable profits and good development prospects. It reflects corporate soft power.
Credit lines have significantly simplified financing procedures. Within a valid period, Zhenghe can apply for credit whenever it needs, without going through any procedures for guarantees.
In the future, the company will strengthen cooperation with various financing banks, continue to raise bargaining power, and gradually increase its line of credit. It will also improve fund management and introduce new financing products to bring down financing costs, increase profitability and reduce the company’s asset-liability ratio.