Product definition

The guaranteed loan to be repaid with refundable government tax refers to the loan that the governments above county (district) level guarantee the enterprise financing with the taxes to be turned over to local governments by the banks and cooperatives of Jilin Province Rural Credit Union (hereinafter as loan bank).

Application requirements

(1) The government shall provide the loan bank with the “Letter of commitment for Returning and Deducting the Default Taxes by Enterprises ”, which shall be approved by the people’s congress at the same level and be included in the local budget;

(2) The government shall sign a tripartite agreement with the loan bank and borrower, to clear the rights and obligations and liabilities for breach of contract;

(3) The government departments shall open a special account with the loan bank for tax return guaranteed loan. The purview of guarantee shall include principal and interest, damage awards, liquidated damages;

(4) The guaranteed amount to be repaid with refundable government tax does not include the relative preferential tax policies that the loan bank enjoys;

(5) The guaranteed amount to be repaid with refundable government tax shall accord with relative national laws and regulations, and shall be determined according to the part retained by local governments after turning over to the state.

Pattern of lending

The loan takes the guarantee mode, in which the government undertakes guaranty liabilities jointly and severally. The government shall issue written letter of commitment of the guarantee to be repaid with government tax revenue. The government, loan bank and borrower shall sign a “tripartite” guarantee agreement for repayment with government tax revenue, which shall be approved by local government. The tax department shall turn over the tax returning amount of the loan bank to the local financial department, which shall be transferred at one time by the financial department to the special account opened by the loan bank for the guaranteed loan to be repaid with government tax revenue as a guarantee.

Use of loan

To be used for the working capital for production operation and investment in fixed assets.

loan amount

The loan amount shall be determined reasonably according to fund demand and repayment capability of the borrower, as well as the amount of refundable government tax. The guaranteed amount to be repaid with refundable government tax shall not exceed 5 times of the part retained and dominated by local government in the ratal turned over by the loan bank last year. But, the guaranteed amount of single enterprise shall not exceed 80% of the guaranteed amount to be repaid with refundable government tax.

Loan period

The period of working capital loan shall be determined according to the production and business operation cycle of the enterprise, which shall not exceed one year and the longest shall not be longer than 3 years (including extended period). The loan period of fixed assets shall be no longer than 5 years (including extended period).

Mode of repayment

The mode of single repayment of principal at maturity shall be taken in principle, with monthly or quarterly interest settlement; monthly interest settlement or quarterly interest settlement shall be made for the loan over a period of one year, the mode of repayment shall be installment repayment or average principal plus interest/average principal repayment.