One, the concept of

   Entrusted loan refers to the client provide legitimate sources of funds, commissioned by the bank according to the client to determine the loan object, purpose, amount, term, interest rates to extend, supervision and assistance loan business. Simple is a direction to another loan, to entrust the third party (commercial banks) management.

   China's "general loans" expressly, barred from borrowing directly between enterprises, but with the bank as an intermediary and the realization of borrowing loans are not prohibited

   Two, the application conditions

   1, the principal and the borrower shall be by the Administration for Industry and Commerce (or authority) approved the registration of enterprises (thing) enterprises, other economic organizations, individual industrial and commercial households, or with full civil capacity of natural persons;

   2, has been open settlement accounts in banks;

   The 3 principal sources of funding must be lawful, and has independent rights;

   4, the entrusted loans alone must bear the risk loans;

   5, the need to pay taxes in accordance with the relevant requirements of the State Bureau of Local Taxation, and cooperate with the trustee for the collect and remit tax payment;

   6, consistent with the other requirements of the banking business. 

   Three, duration and interest rates

   Duration and interest rates are determined in consultation with the client. Since 2004, easing the financial institutions lending rates space, namely the commercial bank loans, the interest rate will no longer be the upper limit, lower loan interest rates for the benchmark interest rate multiplied by the lower coefficient, financial institutions according to the relevant provisions of the people's Bank in the range of the people's Bank of China is to determine the floating rate.

   Four, business process

   1, the principal and the borrower reach financing intention, negotiation determine lending rates, time factor.

   2, the principal and the borrower to open settlement account at a bank, issued by the client proxy "loans" to the business of the bank, and by the trustee and the borrower to the bank to apply for.

   3, the bank accepts the client application, investigation and approval from the examination and approval, to meet the requirements of the customer accepts the entrustment.

   Application of five, entrusted loans in reality

   1, in the enterprise group use -- cash pool business. The commissioned loan funds are allocated within the group. Set up a group of the cash pool account in the name of the headquarters of the company, through its subsidiary, entrusted loans to the headquarters, the daily timing will company funds to cash pooling account. During the day, if the subsidiary foreign payment account remaining sum is insufficient, banks can provide is limited to the existing headquarters capital position limit of the overdraft payment; the end of the day, the return of loan to the company headquarters, the system will automatically send cash pooling account funds allocated to the member companies to complement the overdraft account. According to the prior agreement, commissioned loan interest settlement in a fixed period of time, and through the bank interest allocation.

   Borrowing between 2 groups, in use -- solve group companies. Especially the listing Corporation with listing Corporation funded by bank loans is relatively easy, and then become the group's cash flow station.

   3, third party entrust advances, i.e. the principal and the borrower borrowing as there was no correlation between enterprises. As a method of bypassing the inter company loan ban.

   Six, the cost to business loans

   The entrusted loan model for loans and loans, mainly involves the following fee expenditure:

The first is entrusted loan fees: banks accept the client's entrustment loans, loan amount, loan period according to the entrustment, default clauses in proportion to the principal charge a fee.

The second is the stamp tax loan contract. In general the entrusted loan deal, a deal to pay a tax, each entrust loan to pay stamp duty according to the loan amount. 0.5. Based on the entrust loan cash pool mode, is normally provided by the enterprises and the Local Taxation Bureau of consultation, making the total loans in a certain period, and according to statistics regularly turned over to the tax rate of 0.5.

The last is entrusted loan interest expenses involved in. In the cash pool mode, interval between account borrowing rates should in the provisions of the central bank's deposit, loan datum interest rate. Once interest rates beyond the scope, may on suspicion of transfer pricing and tax departments are in question. Entrusted loan interest income and expense can not report and pay taxes to the net, each interest income should pay business tax according to the amount of interest of 5%, the bank is withheld. But the income tax expenses are paid by the enterprise itself.

In addition, it is worth remembering that, in the new 46 tax in the strict provisions of the anti thin capitalization terms. Enterprise accepts from the related party debt investment and equity investment in excess of the prescribed standards and interest expense, not in the calculation of taxable income. But debt investment and equity investment proportion what a standard has not yet been promulgated, the proportion and the provisions must wait until the tax authorities issued a document to confirm.

   Accounting for seven, entrust loans

   Before, companies can set up "loans" level subjects, under the "principal", "interest", "impairment" three detailed account of entrusted loan accounting, but the new "accounting standards for business enterprises" in 2007 the introduction of the abolition of the "loan" the accounting subjects. And in the "enterprise accounting system" provides second chapter sixteenth: the company entrusted loans, should be regarded as a short-term investment accounting. However, shall be included in profit or loss on interest, entrusted loans; enterprise scheduled due cannot be recovered. The interest, it shall stop the interest, and rushed back to the original appropriated interest. At the end of the term, the enterprise should according to the impairment of assets entrusted loan requirements, a provision for.

In the actual operation of the process for one year (including one year) the following entrusted loans, in the enterprise "short term investment" subjects of accounting. But for more than a year of the entrusted loans, is more complex, the need for "a long-term debt investment and other long-term debt investment (principal, interest accrued) accounting" course.

   Develops the current situation eight, entrust loans

   In the past two years, monetary tightening, high interest returns temptation, entrusted loans began to be used more and more. On the one hand the entrusted loans to cash rich companies to bring new profit growth point, on the other hand, for the cash strapped companies provide relief funds, the bank as an intermediary to obtain fee, increase the intermediary business income, and do not need to take any risk. Entrusted loan so crazy growth, according to the statistics of the people's Bank of China, at the end of the 3 quarter commissioned a new loans of 1.07 yuan, up to 2 times the same period last year scale, the current account for 10.9% of the total social financing.