Is it illegal for bank insiders to operate bridge loan? Although RMB funds are becoming more and more active, according to statistics, more than 60% of private equity transactions in the market are cross-border transactions (denominated in US dollars), and the time span process is long, ranging from half a year to one year from signing the transaction documents to receiving the investment funds from enterprises. For some enterprises with tight cash flow or in urgent need of funds to expand their operations, it is anxious to wait for such a long time. At this time, bridge loan can effectively solve this problem. Bridge loan, as its name implies, is a short-term loan. Generally speaking, the affiliated enterprises of the Fund in China directly borrow millions of RMB from the enterprises, provide short-term loans for six months, and then return the investment funds of the Fund together with interest to the affiliated enterprises. Because Chinese laws stipulate that direct lending between enterprises violates the financial management order, prudent investors will arrange a bank to entrust loans between lending enterprises to regulate this behavior.
Second, is the bank bridge loan illegal?
Bridge loan is in a legal gray area. If the loan contract is not bound to a specific purpose, or indicates that it cannot be used for the acquisition of equity or assets to carry out bridge loan business, the basic legal relationship of the business is still a subordinate legal relationship based on the loan guarantee law.
1. bridge loan (crossing the bridge means that after financial institution A gets the loan project, the funds can't operate, and financial institution B is consulted and asked to help allocate funds. After the funds of financial institution A are in place, B quits. For B, this loan is the so-called bridge loan. In China, commercial banks mainly play the role of financial machine/Export-Import Bank/Agricultural Development Bank and financial institution B. In June of 20021,Guangzhou Local Financial Supervision Bureau informed the company that it was not allowed to carry out "bridge loan" or "foreclosure loan" or settlement, and it was not allowed to issue housing mortgage loans directly or in disguise.
Second, generally speaking, bridge loan is a short-term loan, which belongs to a transitional loan. Bridge loan is an effective tool for directly capitalizing buying opportunities, and the biggest advantage of bridge loan is its quick recovery. Bridge loan has a short term, no more than one year, and the interest rate is relatively high. Therefore, bridge loan is also called "bridge financing", "intermediate financing", "gap financing" or "revolving loan".
Thirdly, bridge loan paved the way for both parties to M&A transactions to know about the temporary or short-term loans provided by banks and other financial institutions to borrowers. It can be in the form of fixed loan or revolving letter of credit, but the term is short. Therefore, it plays a "bridge" role in the transaction, and the loan interest rate is 2%~5% higher. When the market situation changes abnormally, it is necessary to speed up the transaction, and the high cost of buying the market forces the buyer to obtain funds quickly to close the bridge loan transaction. "Then by selling bonds and stock tickets.
Fourthly, in foreign countries, bridge loan usually refers to short-term financing provided by intermediaries to meet the capital needs of their service companies, and then more complicated medium-and long-term loans are arranged. For China securities companies, bridge loan refers to the working capital loan recommended and guaranteed by underwriters and provided by banks to pre-listed companies or listed companies. That is to say, the plan of public offering before listing has been approved by the relevant state securities regulatory authorities. As the raised funds have not yet been put in place, it is necessary to apply to the bank for a working capital loan guaranteed by an underwriter with legal personality.
5. The short-term financing needs before M&A are the working capital loans of listed companies or companies before listing under the guarantee of brokers, and the short-term loans during the merger and reorganization of enterprises.
3. Is it illegal for the director of the bank credit department to personally make an IOU to make a bridge loan?
It is not illegal to sign an IOU as a natural person.
4. Is it illegal to borrow money to cross the bridge?
Borrowing money to cross the bridge is not necessarily illegal. Bridge loan means that when a lending institution has no funds to lend to the borrower, it seeks the help of another lending institution and temporarily lends to the borrower. Bridge loan is in a legal gray area. If the loan contract is not bound to a specific purpose, or it is marked that it cannot be used for equity or asset acquisition, it is legal. Bridge loan violates the law, and the harm of bridge loan is as follows: 1. The financing cost in bridge loan is too high for borrowers or enterprises. Although bridge loan can alleviate the urgent need, due to the characteristics of short time and high interest rate, the financing cost will further increase for borrowers and the repayment pressure will become greater; 2. For enterprise management, the capital chain will face the risk of breakage at any time. Bridge loan mostly happens in small and micro enterprises. Bridge loan's high interest rate will greatly reduce the liquidity of funds. Once the bank lends money, it is prone to the risk of capital fracture. What is the prescription for private lending? 1. The Civil Code stipulates that the limitation period for requesting people to protect civil rights is three years; 2. From the perspective of statute of limitations, if the repayment date is indicated in the IOU, the statute of limitations shall be calculated for three years from the day after the repayment date; 3. If the repayment date is not specified, it indicates that the contract has an indefinite performance period, and the creditor has the right to demand the debtor to perform the debt at any time, but the other party must be given the necessary preparation time. In fact, it is a professional service for people who have applied for a loan but cannot repay it on time for some reason. It is the third-party financial institutions that repay the loans owed in advance instead of these lenders, so as to prevent these lenders from being punished by banks or blacklisted by credit. In practice, prepayment bridge crossing is usually divided into the following four categories: 1, bank acceptance bill deposit prepayment; 2. Advances due from bank loans; 3, consumer loans, housing loans in advance; 4. Other types of prepayment business. Legal Basis Article 4 Personal loans shall follow the principles of compliance with laws, prudent operation, equality, voluntariness, fairness and good faith. Article 11 An individual loan application shall meet the following conditions: (1) The borrower is a People's Republic of China (PRC) citizen with full capacity for civil conduct or an overseas natural person who meets the relevant provisions of the state; (2) The purpose of the loan is clear and legal; (3) The amount, duration and currency of the loan application are reasonable; (4) The borrower has the willingness and ability to repay; (5) The borrower's credit status is good and there is no significant bad credit record; (6) Other conditions required by the lender. Article 681 of the Civil Code of People's Republic of China (PRC) * * * A surety contract is a contract in which the surety and the creditor agree that the surety will perform the debt or assume the responsibility when the debtor fails to perform the due debt or the circumstances agreed by the parties appear.