Before the promulgation and implementation of the Interim Measures, due to the lack of legislative restrictions on the business scope of non-financing guarantee companies and the fact that banks have good personal relationships with bank officials in order to increase loan benefits, they have obtained different degrees of bank credit and also carried out some financing guarantee businesses. However, in reality, due to real capital and geographical restrictions, there are not many guarantee companies that can obtain bank credit. Carry out guarantee business such as bid guarantee, project performance guarantee, advance payment guarantee and property preservation guarantee. The other party's trust and recognition of the guarantee companies are low, there are too many guarantee companies, the competition is fierce and the guarantee fee collection rate is low. Therefore, many guarantee companies adjust their main business to private lending and entrusted loans, and make huge profits. This is also the interest of many units and individuals in setting up guarantee companies.
After the promulgation and implementation of the Interim Measures, the qualification and business scope of financing guarantee were clearly explained. The financing guarantee businesses that financing guarantee companies can operate include: loan guarantee, bill acceptance guarantee, trade financing guarantee, project financing guarantee, letter of credit guarantee and other financing guarantee businesses. Can run concurrently: litigation preservation guarantee, bid guarantee, advance payment guarantee, project performance guarantee, final payment guarantee, and intermediary services such as financing consultation and financial consultant related to guarantee business. You can also use your own funds to invest in fixed-income financial products with high credit rating, such as government bonds, financial bonds, debt financing instruments of large enterprises, etc. At the same time, it also explains the restrictions on business: no deposit, no direct loan, no entrusted loan, no entrusted investment, etc.
Limited by the Interim Measures, the business scope of non-financing guarantee companies has been tightened. Only litigation preservation guarantee, bid guarantee, advance payment guarantee, project performance guarantee, final payment guarantee and intermediary services such as financing consultation and financial consultant related to guarantee business can be carried out. Although the investment of self-owned funds is allowed, there is no restriction on the investment direction of self-owned funds of non-financing guarantee companies. But I personally understand that the width of investment cannot be higher than that of financing guarantee companies.
In addition, financing guarantee companies are not allowed to lend or entrust loans, and non-financing guarantee companies will no longer be protected by law. Of course, many companies will continue to engage in direct lending and lending intermediary business by adjusting their business methods.
Although non-financing guarantee companies are no longer qualified to engage in financing guarantee business, under the changed rules, we can consider cooperating with financing guarantee companies, with financing guarantee companies guaranteeing banks and non-financing guarantee companies guaranteeing financing guarantee companies. Non-financing guarantee companies can also recommend business to financing guarantee companies and charge them guarantee fees, and so on.