Entrusted payment is a payment method of loan funds, which means that the lender (a legally established banking financial institution) pays the loan funds to the borrower's transaction object according to the borrower's withdrawal application and payment entrustment, so as to reduce the risk of loan misappropriation.

The application scope of entrusted payment is: the single amount of loan funds exceeds 5% of the total investment of the project or exceeds 5 million yuan. Entrusted payment helps to improve the quality of loans issued by commercial banks, strengthen the scientific management of the whole process of loans, and is also beneficial to management and truly realize loan management. Commercial banks can upgrade the loan risk management model from extensive to refined.

Entrusted payment is basically clear, but why do many people choose to avoid this way?

When we take out a loan, we usually choose to apply for a suitable amount instead of the actual demand, so that after the loan, there will be a surplus of funds, which can be used to do other things and get some income from other aspects. This kind of direct loan to the other party actually eliminates all these extra interest. As mentioned earlier, because it can't be taken out at one time, it will result in less funds in hand and less short-term investment income.

In addition, access to funds is also a problem. As we all know, the loan procedures of your own bank are usually very complicated, not to mention that a company borrows a lot of money, which will make the procedures more complicated. The immediate problem is that it takes a long time to deal with it, which may be as long as half a year. But after the project started, it went beyond time and money. And countless business leaders are worried that loans can't keep up with the start-up time of their own projects. It would be great if we could get the money before we start work. But more problems lie in working conditions. When the party who gets the loan starts to work as required, once the quality is unqualified after the work is completed, the two sides will often start to argue, and then the payment problem will begin to appear. If the project quality does not meet the requirements, the borrower and the project construction unit have disputes, how to ensure the interests? This has become a problem that people have to think about.