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FPSP: Funding Program for Small and Medium Enterprises (SME) and Processing Trade Enterprises (PTE)
http://www.dongguantoday.com    8/10/2009 7:42:00 PM

Apply for credit guarantee

Eligibility and procedures

(a) Enterprises may apply for a credit guarantee if they meet the following criteria:

• Register as an independent legal person with Dongguan’s industry and commerce authority
• Be able to provide proof of profitable corporate operations, good debt/equity ratio, good credit history and have no major business disputes
• Be able to provide proof of loan utilization in the city’s targeted industry businesses according to facts and laws
• Be able to provide counter-guarantee measures (slightly varied among different institutions)
• Agree to assist guarantee institutions in conducting pre-guarantee investigations and post-guarantee management

NOTE:Acceptable counter-guarantee measures include:

• Land, with proof of a land sale contract, receipt and property right certificate approved by the local authority
• Real estate, with proof of clear property ownership, contract of construction, receipt of construction payment, and project application and approval
• Equipment
• Inventory of goods
• Trademarks
• Patented technologies
• Equities and securities

(b) Documents to be submitted by the borrower:

• Security application, resolution of the board of directors or shareholders and specimen signatures of all board members or shareholders
• Basic documentation: business license, corporate charter, organization code certificate, tax registration certificate, active bank account certificate , corporate profile registered with the official industry and commerce system, ID of shareholders and their spouses
• Financial information: balance sheet, income statement, bank statement, etc.
• Description of loan purpose
• Counter-guarantee documents: proof of ownership of collaterals and pledge
• Information on related enterprises and documents essential to investigation and assessment of credit institutions

NOTE: Requirements for documents vary among guarantee institutions.

(c) Procedures for applying to credit guarantee institutions

3. Guidelines for obtaining interest subsidy

• The borrower pays full interest to the bank
• The People’s Bank of China Dongguan Branch evaluates the borrower’s qualification
• The Dongguan Financial Service Office and Dongguan Finance Bureau review the case and make final determination
• The municipal budget allocates an interest subsidy to the bank
• The bank returns subsidized interest to the borrower’s account

4. Guidelines for transformation of overseas-invested enterprises (TOIE) applying for FPSP assistance

A TOIE is an enterprise that was formerly a PTE. Regardless of the length of time since transformation, the TOIE is eligible to apply for FPSP assistance as long as it is deemed qualified as provided in the manual Divisions on the Highlighted Small and Medium Enterprises and Processing Trade Enterprises Funding Support Program

If the TOIE is newly transformed and has failed to provide an annual financial statement to the bank, it can ask its headquarters to provide a retrospective financial statement which reflects annual corporate operations. It can then be considered a favorable candidate of FPSP when the retrospective financial statement is endorsed by Chinese branches of foreign banks or overseas-owned services.

If the TOIE is newly transformed and has PP&E (property, plant & equipment) in Dongguan, the TOIE should submit:

• PP&E ownership certificates issued by the related township or village authority, if assets are possessed by TOIEs
• Specialized certificates requested in case of unclear PP&E ownership
• PP&E qualification documents issued by the township or village authority prior to PP&E being used as collateral

In the event of credit failure, town/subdistrict or village governments will assist the lenders in liquidating PP&E formerly owned by the TOIE, if the TOIE has outstanding loans from banks or guarantee credit institutions.

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Source:www.dgtoday.com.cn/ Dongguan Bureau of Foreign Trade and Economic Cooperation  Editor: Tan Jing
 
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