China's drive to widen credit access for early-stage technology firms has seen a Tianjin developer of automotive braking systems secure an unsecured loan worth 2 million yuan (about 300,000 U.S. dollars) within days, highlighting how lenders are moving away from revenue figures and toward patents and customer orders.
Tianjin Edge Rock Precision Technology focuses on the research, production and sales of braking systems for new‑energy vehicles. The loan bridged a funding gap that had stalled its move from development to mass production, giving Chairman Zhao Xun confidence to press ahead.
"Once the loan came through, the biggest change was the peace of mind it brought. With the financing in place, we could fund raw-material purchases as well as research and testing," said Zhao.
The case comes as China's central bank directs more credit toward technology companies. Data released by the People's Bank of China (PBOC) in July showed outstanding loans to technology-based small and medium-sized enterprises (SMEs) stood at 4.15 trillion yuan, or about 617 billion U.S. dollars, at the end of June.
The figure includes loans denominated in yuan and foreign currencies. The loan balance was up 20.1 percent from a year earlier, 15 percentage points faster than overall credit growth.
Some 305,600 technology-based SMEs had received credit support by the end of June, lifting the share of such companies with loans to 50.8 percent nationwide.
Earlier this year, the PBOC raised the quota for its re-lending facility for technological innovation and technical transformation to 1.2 trillion yuan, or nearly 180 billion U.S. dollars, and cut the re-lending rate to 1.25 percent to furthe support SMEs.
China expands credit funds to support tech-enterprise innovation
