Therefore, it is necessary to investigate the five P's of credit recipients in advance.
The so-called five P factors are (1), the borrower (2), the use of funds (3), the source of repayment (4), the guarantee of creditor's rights (5) and the prospect of the borrower.
(1) Borrower factors (personal factors) 1. The borrower must have the sincerity to repay the debt, be unwilling to breach the contract under any circumstances and be able to face the debt directly and solve it through cooperation; This can be investigated and evaluated from family background, education, morality, sense of responsibility, social experience, peer evaluation and so on. 2. Understanding the borrower's operating ability refers to the ability of the enterprise management to use the loan reasonably, the production capacity, sales capacity and profitability of the enterprise; This can be judged by on-the-spot investigation and interview, relevant financial proportion analysis, experience, professional knowledge, technical development ability and other information. 3. Understand whether there are records of loan extension and refund in the past. 4. The relationship between the borrower and the FSC (including deposits and loans) and the centripetal force towards the FSC. 5. The industry reputation and social status of the borrower are intangible assets, which can be used as a reference for capital.
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(II) Purpose Factors The purpose of funds can be summarized as: 1. Purchase of assets: (1) Purchase of seasonal liquid assets, such as working capital of inventory. (2) Purchase non-seasonal current assets, such as regular working capital. (3) purchasing non-current assets, such as purchasing or acquiring equipment. 2. Repaying the existing debts: paying off debts with debts. 3. Equity replacement: borrowing to replace the share capital that should have been increased by shareholders. Buying assets is the best use; Replace other creditors, in turn; Using alternative equity is the worst, because the risk is the highest.
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(3) Payment coefficient (1). Repayment in exchange for assets: the repayment of loans recovered through asset changes in the normal operation of enterprises. Self-paying creditor's rights, the repayment source is bills receivable obtained from selling goods or providing services in normal transactions. 2. Cash flow repayment: if the repayment of any loan does not depend on the change of assets, it must be repaid by the borrower's cash flow, that is, the repayment source focuses on the borrower's future surplus or external funds (capital increase, liabilities, etc.). ).
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(4) The protective factors of creditor's rights can be divided into internal protection and external protection:
1. Internal guarantee: (1) Borrower's financial structure: Is the debt burden too heavy? Is the profit rich? This can be seen from the net ratio, fixed ratio, current ratio, quick ratio and return on capital. (2) Collateral: such as land, factory buildings, machinery and equipment, transportation equipment, certificates of deposit, stocks, warehouse receipts, etc. Can be used as collateral. (3) Restrictive conditions of the loan contract: such as keeping the net working capital above the limit during the loan period, providing financial statements on time, restricting the distribution of earnings, restricting shareholders from recovering advances, and prohibiting the sale or lease of fixed assets.
2. External guarantee: refers to the third party undertaking the borrower's credit responsibility to the financial industry. Usually, the external guarantee of bank's creditor's rights includes guarantee and endorsement. (1) The guarantor's guarantee shall be substantial and avoid environmental protection and endorsement of bills. (2) Whether the financial responsibility of the borrower can be guaranteed through the participation of a third party. (Whether there are guarantees for performance of the contract, subsidiary liabilities, repurchase agreements, etc.). ).
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(V) The borrower's perspective factors pay attention to the borrower's business prospects, that is, analyze the future of the borrower's industry and the borrower's own future development, and then estimate the basic risks and expected returns of the credit case and make a decision on whether to lend.