What's the difference between a loan company and a finance company?

1, institutional type difference

(1) loan company

A loan company refers to a banking non-deposit financial institution established in rural areas by domestic commercial banks or rural cooperative banks with the approval of China Banking Regulatory Commission according to relevant laws and regulations, which provides loan services for county farmers, agriculture and rural economic development.

(2) Finance companies

Finance companies, also known as finance companies, are non-bank institutions that provide financial services for enterprise technological transformation, new product development and product sales, focusing on medium and long-term financial services.

2. Difference of registered capital

(1) loan company

The registered capital of the loan company is not less than RMB 500,000.00 Yuan, which is paid-in monetary capital, which shall be fully paid by the investors at one time.

(2) Finance companies

The minimum registered capital for the establishment of a finance company is RMB 654.38 billion. The registered capital of a finance company shall be paid-in RMB or equivalent convertible currency. The registered capital of a financial company engaged in foreign exchange business shall be no less than US$ 5 million or the equivalent in a freely convertible currency.

3, the difference between system norms

(1) loan company

On August 1 1, 2009, the CBRC issued the Notice on the Management Provisions of Loan Companies (No.76 of 2009), which standardized the behavior of loan companies in China.

(2) Finance companies

Financial companies are established according to the Company Law and the Measures for the Administration of Financial Companies of Enterprise Groups, which standardize the behavior of financial companies in China.

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