Entrusted loan refers to the loan business in which the principal provides funds from legal sources, and the entrusted bank issues, supervises the use and assists in the recovery according to the loan object, purpose, amount, term and interest rate determined by the principal.

1. Entrusted loan refers to the loan business in which the principal provides funds from legal sources, and the entrusted business bank issues, supervises the use and assists in recovery on behalf of the principal according to the loan object, purpose, amount, term and interest rate determined by the principal. Customers include government departments, enterprises, institutions and individuals. Let's take an example to understand: Company A wants to borrow money from Company B, but because it has no loan qualification, there are only two ways to borrow money from Company A. The first way is to actually do a loan business through "fuzzy" treatment methods such as prepayment of funds, fund occupation and fund exchange, and the court also supports it, but it is impossible to make it clear that this business is the loan responsibility stipulated in the Contract Law. The second way is to entrust loans through banks or licensed financial institutions. So what are the specific benefits of entrusted loans?

Second, 1, the security bank will control the compliance of the whole loan. When there is collateral, it is generally mortgaged to the customer (that is, the bank), and the bank will supervise the collateral. If there are bad debts in the future, it will be more convenient to dispose of the collateral.

2. Credit management is more standardized. Banks can check and report credit information, which is more deterrent to the credit management of borrowers.

3. In the tax declaration, the actual interest rate of entrusted loans can be deducted from the bank for tax declaration, while the loans between enterprises and non-financial institutions are usually declared according to the benchmark interest rate of bank loans in the same period, so the corresponding preferential tax treatment cannot be obtained.

4. In the examination and approval of entrusted loans, banks are more suitable for industries with high leverage and high capital cost, such as real estate. Now entrusted loans are very beneficial, because the state has introduced relevant policy support.

Third, the Administrative Measures for Entrusted Loans of Commercial Banks clearly stipulates the sources of entrusted loans, which can prevent idle credit funds, guide credit funds to better serve the real economy, and promote the healthy development of enterprises, especially small and medium-sized enterprises. Generally speaking, entrusted loans have expanded the loan amount and facilitated more individuals and enterprises to obtain loans smoothly. The current financing environment is in a relatively relaxed state, which is a good time for loans.

What does the bank entrust loan mean?

1. Bank entrusted loans refer to personal entrusted loans launched by banks, that is, personal entrusted bank loans. Banks launch personal entrusted loans, mainly to play the role of bank credit intermediary, to bridge the gap between private lenders and borrowers, and to act as supervisors and witnesses.

2. The entrusted loan from the bank means that Party A and Party B lend money to Party B, and both parties sign an entrusted loan agreement with the bank. A deposits the money in the bank, and the bank lends the money to B. As a supervisor and witness, the bank investigates B in the early stage and is responsible for supervising the safety of funds and the recovery of principal in the later stage. The purpose of this is to make the scheme more in line with the relevant regulations with the help of the bank's risk control ability.

3. The principal of an individual entrusted loan may be a government agency, enterprise, institution or individual. The borrower of an individual entrusted loan must be a natural person with full capacity for civil conduct and have a legal and valid identity certificate.

The term of entrusted loan shall be determined by the client according to the borrower's loan purpose, repayment ability or the specific circumstances of entrusted loan. In entrusted loans, the entrusted loan interest rate involved shall be determined by the entrusting party, but it shall not exceed the loan interest rate and floating range for the same period stipulated by the People's Bank of China.

What is the personal entrusted loan of China Bank?

Personal entrusted loan of China Bank refers to the loan provided by the principal, which is issued, used and recovered by the trustee according to the loan object (individual customers only), purpose, amount, currency, term and interest rate determined by the principal. The main body of personal entrusted loan business includes the principal, the trustee (unless otherwise specified below, the trustee refers to the domestic branch authorized by Bank of China to start personal entrusted loan business), the borrower and the guarantor (if any).

The above contents are for your reference. Please refer to the actual business regulations.

If you have any questions, please contact online customer service of Bank of China.

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What is entrusted loan? What's the difference between it and direct borrowing?

Entrusted loan means that the lender (principal) entrusts the bank (trustee) to lend the funds to the borrower, and the funds are owned by the lender. Banks only serve as a platform to monitor the flow of funds and the collection of principal and interest. If the principal and interest are not repaid on time, the borrower will be registered as the credit record of PBOC.

Direct loan means that the lender pays the funds directly to the borrower, and there is no bank as the capital channel.

Entrust loan application conditions

The trustor and the lender shall be enterprises (institutions), other economic organizations, individual industrial and commercial households or natural persons with full civil capacity approved and registered by the administrative department for industry and commerce (or competent authorities); A settlement account has been opened in a commercial bank; The source of entrusted funds must be legal and have independent control; To bid for entrusted loans, you must bear the loan risks alone; Pay taxes according to the relevant requirements of the State Local Taxation Bureau, and cooperate with the trustee to collect and remit taxes; Meet other requirements of commercial banks.

Term interest rate of entrusted loans

The term of entrusted loan shall be determined by the client according to the borrower's loan purpose, repayment ability or the specific circumstances of entrusted loan;

In entrusted loans, the entrusted loan interest rate involved shall be determined by the entrusting party, but it shall not exceed the loan interest rate and floating range for the same period stipulated by the People's Bank of China. Since 2004, the floating range of the loan interest rate of commercial banks has been expanded to (0.9, 1.7), that is, the lower limit of the loan interest rate of commercial banks to customers is the benchmark interest rate multiplied by the lower limit coefficient of 0.9, and the upper limit is the benchmark interest rate multiplied by the upper limit coefficient of 1.7. Financial institutions can determine their own floating interest rates within the scope stipulated by the People's Bank of China.

Entrusted loan business process

The client and the borrower reach a financing intention, and negotiate to determine the loan interest rate, term and other factors.

The client and the borrower open a settlement account in a commercial bank, the client issues a loan authorization letter to the commercial bank, and both the client and the borrower apply to the bank.

Banks accept clients' entrustment applications, conduct investigation and approval, and then accept entrustment from qualified clients.

Cash pool

It is to transfer funds within the group through entrusted loans. Entrusted loan simply means that one party lends money to another party and entrusts it to a third party (commercial bank) for management. Commercial banks do not bear the risk of loan losses, but are only responsible for issuing, supervising the use and assisting in the recovery of loans on their behalf according to the objects or investments designated by the clients, the prescribed purposes and scope, and the set conditions (amount, term, interest rate, etc.). Entrusted loans are used as a way to circumvent the inter-company lending ban.

The basic operation of the cash pool is to set up a group cash pool account in the name of the company's headquarters, and transfer the funds of subsidiaries to the cash pool account regularly every day by entrusting loans from the headquarters. When making external payments during the day, if the balance of the subsidiary's account is insufficient, the bank can provide overdraft payment limited to the amount of the fund position deposited in the headquarters; At the end of the day, the system will automatically transfer the funds in the fund pool account to the account of the member enterprise, and make up the overdraft amount by returning the loan entrusted by the headquarters to the subsidiary. According to the prior agreement, the entrusted loan interest is settled within a fixed period of time, and the interest is transferred through the bank.