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Why does Evergrande owe two trillion yuan?

Evergrande exploded. As one of the four major real estate companies in my country, it has always been a leading figure in real estate industry. Suddenly it was revealed that Evergrande owes 2 trillion yuan in debt. This amount has to be let go. Many netizens were in an uproar. Evergrande's business model has always been to develop through the times, continue to use money to develop real estate, and take advantage of the real estate trend in the past few years to start to grow bigger and stronger. Evergrande Group is able to have so much funds to develop real estate and owes 2 trillion yuan. It mostly borrows from banks, and then obtains certain funds in the form of arrears from other construction and building materials companies, and uses other Users who buy houses use 70% of the purchase price to develop real estate. So far, the 2 trillion yuan owed by Evergrande Group has not been paid off, and part of the amount still needs to be repaid.

Evergrande Enterprise chose to continue to expand and use cash flow, allowing too much money to be developed in real estate development. Through continuous loans from banks, it has sufficient funds and more money to do so. real estate. It is understood that this company has selected more than 100 banks for loans to develop land. The real estate industry in the past few years can be said to have developed very rapidly. In many places, due to land development, many ordinary people, Hu Congqian, would choose to buy new houses. This has also allowed real estate companies to develop rapidly, resulting in the continuous expansion of Evergrande Enterprises. At the same time, the company's popularity and development trends are steadily rising.

Evergrande helps the company develop by continuously cooperating with other construction companies and building materials companies, and obtains enough money by paying other companies IOUs and arrears to develop more real estate. , once problems arise, the capital chain is prone to shortages. Even without Zheng Shenlei's exposure, Evergrande's status in the hearts of consumers is very high. As one of the well-known real estate companies in China, Evergrande's brand effect is still very loud, which has also caused many construction companies and building materials companies to Large debts can be settled.

In addition to choosing to borrow from banks and contract with other construction companies and building materials companies to get more rewards, Zheng Shen also used part of the consumer's down payment to continuously develop real estate. As a result, Evergrande owes 2 trillion yuan, and so far the amount has not been repaid.