Relevant provisions on the issuance of loans by guarantee companies:
Article 2 1 of the Interim Measures for the Administration of Financing Guarantee Companies stipulates: "Financing guarantee companies shall not engage in deposit taking, loan granting, entrusted loan, entrusted investment and other activities prohibited by the regulatory authorities." Therefore, if a financing guarantee company issues a loan beyond its business scope and affects the stability of the financial order, according to Article 10 of the Interpretation of Contract Law: "If a party enters into a contract beyond its business scope, the people's court does not consider the contract invalid. However, unless it violates the state's restrictions on operations, franchising, and laws and administrative regulations prohibiting operations. " Based on the above provisions, the loan issued by the guarantee company shall be invalid.
In addition, financial enterprises must obtain the legal person license of financial institutions in accordance with the law before they can engage in deposit and loan business, otherwise they may not engage in the aforementioned financial business. Article 1 1 of the Law on Commercial Banks stipulates that no unit or individual may engage in commercial banking business such as absorbing public deposits without the approval of the the State Council Banking Regulatory Authority. Guarantee companies engage in or engage in financial business in disguised form without obtaining the qualification of financial franchise for lending business approved by the relevant state departments, which will certainly disrupt the national economic order and harm the public interests. Although the Interim Measures for the Administration of Financing Guarantee Companies is only an administrative regulation, it cannot be used as a direct legal basis for the people's court to determine the validity of the contract. However, on the issue of determining the validity of loans issued by financing guarantee companies, the people's court may invoke the provisions of Article 10 of Interpretation of Contract Law (I) and Article 52 of Contract Law to determine that the contract is invalid.
If a non-financing guarantee company issues loans, the people's court shall, mutatis mutandis, determine that the private loan contract is invalid, and the guarantee company entrusts its own funds to banks or other financial institutions that are qualified to issue loans, which is in line with the provisions of the General Rules for Loans of the People's Bank of China, and the people's court shall determine that the loan contract is valid.