At present, as the situation of COVID-19 prevention and control becomes stable, Shanghai has entered a critical period of restarting economic and social activities. In order to fully support the affected industries and enterprises to overcome difficulties and recover development, the Municipal local Financial Regulatory Bureau issued the "Shanghai Financial Support Measures for Enterprises to Promote Development and Fight the epidemic" on April 1, including reducing the guarantee rate of various enterprises' financing, providing discount support for new loans to enterprises in difficulty, and increasing the first loan and credit loan support for small and micro enterprises. On May 29, the Shanghai Municipal Government issued the "Shanghai Action Plan to Accelerate Economic Recovery and Revitalization" (hereinafter referred to as the "Action Plan"), which involves financial measures to further increase support for enterprises to resume work and production. Through combing, Hillhouse Law firm analyzes and suggests the prone risk points for enterprises to apply relevant financial support measures, so as to guide enterprises to make reasonable choices and standardize application.

一、Financing guarantee related support measures

1. We will increase the scale of government financing guarantee business. We will encourage government financing guarantee institutions to provide financing and credit enhancement support to eligible micro, small and medium-sized enterprises and individual industrial and commercial households, further increase the risk tolerance of guarantee, expand the scale and coverage of financing guarantee, and help enterprises that are most affected by the epidemic renew their insurance and loans. The "Action Plan" also further clarified that the relevant municipal departments and districts are encouraged to implement the policy of discount interest and fees for the bank loans secured by small, medium-sized and micro enterprises through the government financing guarantee institutions.
2. Lower guarantee rates for all types of corporate financing. For the new bank loans applied by key enterprises in epidemic prevention and micro, small and medium-sized enterprises greatly affected by the epidemic in 2022, the financing guarantee rate of the municipal financing guarantee center is 5%, the re-guarantee rate is charged by half, and the guarantee premium for start-up guaranteed loans will continue to be waived, and interest discount fees will be given to policy-based agricultural guarantee projects. The "Action Plan" also further clarified that the average guarantee rate of district-level government financing guarantee institutions was reduced to less than 1% (inclusive).

二、Enterprise interest discount, discount related support measures

1. We will provide discount interest support for new loans to enterprises in difficulty. With the existing special support funds, for difficult enterprises in retail, transportation and other industries that are greatly affected by the epidemic, the relevant competent authorities will determine the list of enterprises and after review, and give discount interest to their new loans in 2022, and the municipal and district financial funds will be supported.
2. We will continue to provide interest discounts for new infrastructure projects. In accordance with the "Shanghai New Infrastructure Construction Projects Discount interest Management Guidance", eligible projects to give discount loan support.
3. The Action Plan also further clarifies that the acceptance period of commercial bills will be shortened from one year to six months, and the rediscount support will be increased.

三、Financial inclusion related support measures

1. Promote the continued growth of the balance of small and micro loans. Financial institutions are encouraged to give priority to supporting sectors in difficulty, especially small and micro enterprises and private enterprises. We will support policy banks and development financial institutions in using improved lending policy tools to support the rescue and development of small and micro enterprises. The action plan further clarifies that banks in Shanghai will provide relief loans with preferential interest rates to key enterprises in epidemic prevention, enterprises in difficulty that are greatly affected by the epidemic, small, medium and micro enterprises, and individual industrial and commercial households.
2. We will increase support for initial loans and credit loans to small and micro enterprises. Banks in Shanghai are encouraged to optimize the supply of credit products, increase support for credit loans, and increase the proportion of initial loans and credit loans. We will support qualified local legal banks to increase the investment of loans related to agriculture, small and micro enterprises, and private enterprises, especially inclusive small and micro credit loans.
3. We will not blindly withhold loans, withdraw loans, cut off loans, or pressure loans. We will support banks in Shanghai in promoting the business of renewing loans without repayment of principal.  The "action plan" also further clarifies that pilot banks will expand the seamless renewal loan service objects from small and micro enterprises to medium-sized enterprises, and strive to achieve an increase of 100 billion yuan in seamless renewal loans by 2022.
4. We will further improve the policy of granting credit awards to micro, small and medium-sized enterprises. The threshold for credit risk compensation will be lowered, and the lower limit for banks to invest in catering retail, foreign trade, cultural tourism, transportation and other key industries affected by the epidemic will be lowered from 5% to 1.2%.
5. We will do a good job in protecting the rights and interests of credit investigation. According to the relevant regulations of the People's Bank of China, enterprises that have temporarily lost their sources of income due to the epidemic can submit credit records according to the adjusted repayment arrangement.
6. The "action Plan" also further clarified that local financial organizations such as small loan companies and pawn shops are encouraged to appropriately reduce financing costs for difficult industries, small, medium and micro enterprises and individual industrial and commercial households, and reduce the pressure on customers to repay loans by means of extension, exemption from penalty interest, and non-repayment of principal.

四、Related support measures for fee reduction and profit transfer

1. Lower financing costs for enterprises. Give full play to the role of the loan market quotation rate (LPR) reform, urge Shanghai banks to embed LPR into the internal pricing and transmission related links, dredge the internal interest rate pricing transmission mechanism of banks, and promote the actual loan interest rate to continue to decline on the basis of a substantial reduction in the previous period. We encourage policy banks and development financial institutions to make good use of policy tools such as special policy loans and emergency loans in the fields of epidemic prevention and control and stabilizing growth, and stabilizing foreign trade, to effectively support the rescue and development of the real economy.
2. We will encourage financial institutions to reduce fees and yield profits. Banks in Shanghai are encouraged to waive management fees and annual fees for all unit settlement accounts for small and micro enterprises and individual industrial and commercial households on the basis of waiving management fees and annual fees for one account; For small and micro enterprises and individual industrial and commercial counters, online banks, mobile banks, ATMs and other channels, a single transfer fee of less than 100,000 yuan (inclusive) to public inter-bank remittance shall be discounted by no more than 10% of the current government-guided price standard; For small and micro enterprises and individual industrial and commercial households, a single transfer within 100,000 yuan through the above-mentioned channels is exempt from remittance fees. The acquiring agency will reduce the acquiring service fee to the merchant simultaneously according to the service fee of the card issuing bank and the preferential margin of the online service fee.
3. We will strengthen the role of insurance guarantees. Support insurance companies in Shanghai to further enrich the supply of anti-epidemic insurance products, expand the coverage of COVID-19 insurance coverage, and expand the coverage of risks such as business interruption insurance caused by the epidemic. We will strengthen anti-epidemic insurance protection services, introduce appropriate ways to extend policy terms, reduce premium rates, and delay premium payment, and establish a green channel for insurance claims settlement to improve the efficiency of claims settlement. Insurance institutions are encouraged to provide credit guarantee insurance, loan guarantee insurance and other products to small and micro enterprises affected by the epidemic, increase the amount of export credit insurance coverage, and expand the coverage of small and micro enterprises.

五、Related support measures for key industries

1. We will implement relief and support measures for catering, retail and other service industries. Encourage financial institutions to use accounts receivable, orders and other information to provide credit loans to catering enterprises. For enterprises listed in the support list, such as emergency insurance, key cultivation, and convenient living circle construction, financial institutions are encouraged to increase credit support and reasonably reduce loan interest rates under the principle of marketization. Financial institutions are encouraged to make use of data such as transaction flow of small, medium and micro enterprises and individual industrial and commercial households, leasing of business premises and relevant credit information to issue more credit loans.
2. We will implement relief and support measures for the tourism industry. We will carry out a city-wide trial of insurance instead of deposit, and support insurance institutions in Shanghai to launch innovative performance guarantee insurance for travel agency service quality deposit. Governmental financing guarantee institutions are encouraged to provide financing and credit increase support to eligible tourism operators, and help enterprises affected by the epidemic renew their insurance and loans. We will increase special funding support for tourism, and provide discount support to qualified travel agencies, A-level tourist attractions and other tourism enterprises.
3. We will implement relief and support measures for the transport sector. We will continue to provide subsidies to eligible air routes through the Civil Aviation Development Fund and discount interest on loans for civil aviation infrastructure. Establish green channels for issuing debt financing instruments for airlines and civil airports severely affected by the epidemic.
4. We will support enterprises in expanding channels for direct financing. We will give full play to the direct financing function of the capital market and support eligible enterprises in issuing special bonds for relief and epidemic prevention and control. Encourage securities brokerages in Shanghai to strengthen docking with enterprises, study debt financing to support the anti-epidemic plan, and comprehensively use capital market tools such as fixed increase, corporate bonds and asset securitization to increase direct financing support for enterprises. Securities brokerages in Shanghai are encouraged to accelerate the progress of investment in rescue fund projects and strengthen the direct financing support of social capital for small and micro enterprises. The Action Plan further clarifies that financial institutions will be supported to issue financial bonds and provide financing support for enterprises in key areas. In accordance with the requirements of national policies, the transaction fees of bond financing for private enterprises can be exempted, and the cross-border financing channels of enterprises can be further expanded.
5. The Action Plan also specifically mentions strengthening policy-based financial support for foreign trade enterprises. Such as increasing the support of export credit insurance, expanding the coverage of small and medium-sized enterprises, optimizing the conditions of underwriting claims, opening a "single window" in Shanghai to report loss claims channel, establishing a premium delay mechanism and a fast payment mechanism, should be guaranteed, can pay quickly. At the same time, for small, medium and micro enterprises that meet the conditions of "specialized and special new", on the basis of the original export credit insurance rate, the implementation of phased fee reduction of not less than 10%, and increase insurance financing support; Support the Shanghai Branch of the Export-Import Bank of China to set up a special credit line for import and export business, establish a fast review channel, and actively use preferential policy interest rate loans or seek other preferential interest rate policies from the head office to reduce the financing costs of enterprises.

    六、Risk points of financial support measures for enterprises and relevant suggestions

1. During the performance of the financial loan contract, most cases in which financial institutions Sue the borrower are that the borrower is unable to repay the loan due, and the common defense opinion of the borrower is also to accept the loan but have no money. In this regard, it is recommended that enterprises plan the source of funds for repayment when borrowing money, use the money according to the agreed purpose after borrowing money, do not use it for other purposes, let alone lend it to others after raising interest rates.
2. During the performance of the financial loan contract, most cases in which financial institutions Sue the borrower are that the borrower is unable to repay the loan due, and the common defense opinion of the borrower is also to accept the loan but have no money. In this regard, it is recommended that enterprises plan the source of funds for repayment when borrowing money, use the money according to the agreed purpose after borrowing money, do not use it for other purposes, let alone lend it to others after raising interest rates.
3. The borrower provides false materials or forged materials to defraud the bank loan constitutes a crime, and the enterprise as a guarantor still has the risk of bearing civil liability. In this regard, it is recommended that enterprises as far as possible in accordance with the operating norms and work processes, do not participate in the production or submission of false materials, when the staff of financial institutions, other enterprises require or imply that fake loans can be issued, should clearly refuse and retain relevant evidence to avoid falling into criminal cases.
4. Enterprises should fully understand the legal risks in mutual insurance and guarantee, carefully choose mutual insurance and guarantee loans, small and medium-sized enterprises in the application for loans, sometimes the staff of financial institutions will be required to provide guarantees to financial institutions in a bad business customer enterprises, it is recommended that enterprises do not provide such guarantees in order to obtain loans, should be clearly rejected.
5. Enterprises should read carefully and sign loan contracts carefully. There are more standard clauses and fill-in-the-blank clauses in financial loan contracts. In this regard, it is recommended that enterprises carefully study the standard terms in the contract provided by the financial institution and ask the other side to make explanations, and it is recommended to fill in all the blank terms and underline the useless parts.

In the process of business operation, financing activities are essential, especially under the epidemic, many enterprises are in urgent need of capital "blood transfusion". The capital business of financial institutions is relatively standardized, and it is the first choice for enterprise financing. This time, the corporate financial support measures launched by Shanghai are rich in variety, extensive in radiation and unprecedented in strength, and the majority of financial institutions are also quickly responding to the implementation of specific businesses, which are worthy of positive attention of enterprises, and in combination with their own actual selection and application, in order to alleviate financial pressure. Hillhouse Law Firm will give full play to its professional advantages and effectively help enterprises prevent relevant legal risks; In light of the current epidemic prevention and control needs and the actual situation of enterprises, we will provide more forms of legal services for enterprises to help them resume work and production.