Business to business can borrow from each other. However, borrowing from the public is limited to the needs of production and operation. According to the relevant laws and regulations, private lending contracts signed between enterprises for the needs of production and operation shall be deemed as valid unless otherwise stipulated by law. It can be seen that it is legal to allow enterprises to borrow and establish a loan relationship according to law. The loan between companies is under any of the following circumstances as stipulated in Article 14 of the Supreme Court's Provisions on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases, or according to the provisions of Articles 146, 153 and 154 of the Civil Code, the loan contract between companies is illegal and invalid, but it is legal to adopt financing methods such as entrusted loans.
legal ground
Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases Article 1 The term "private lending" as mentioned in these Provisions refers to the financing behavior between natural persons, legal persons and unincorporated organizations. These provisions shall not apply to financial institutions and their branches engaged in loan business established with the approval of the financial supervision department, as well as disputes arising from loans and other related financial businesses.