Legal basis: Article 14 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases shall be deemed invalid by the people's court in any of the following circumstances:
(a) to obtain credit funds from financial institutions and lend them to borrowers at high interest rates, and the borrowers knew or should have known in advance;
(2) The borrower knows or should know in advance that the funds obtained by borrowing from other enterprises or raising funds from employees of the unit are lent to the borrower for profit;
(3) The lender knows in advance or should know that the borrower is still providing loans for illegal and criminal activities;
(4) Violating public order and good customs;
(five) other violations of the mandatory provisions of laws and administrative regulations.
The Supreme Court's "Reply on How to Deal with Loans Failing to Pay Back by Borrowers in Enterprise Loan Contracts" stipulates that enterprise loan contracts violate relevant financial laws and regulations and are invalid contracts.
"General Rules for Loans" Article 61 Administrative departments at all levels, enterprises and institutions, cooperative economic organizations such as supply and marketing cooperatives, rural cooperative foundations and other foundations shall not engage in financial businesses such as deposits and loans. Enterprises shall not handle lending or disguised lending financing business in violation of state regulations.