The 2 million yuan bank loan of Zhejiang Xintong Air Conditioning Manufacturing Co., Ltd. expired, and the company did not resort to private lending as it had done before. Instead, it quickly solved its capital turnover problems through the newly established "Mutual Assistance Fund Committee" in the automotive air conditioning parts industry. "Running a business is hard, but financing is the hardest," said Ye Pinliang, the general manager of Xintong Company, with a mix of sigh and excitement: "With the help of the industry mutual assistance association in solving the difficulties of capital turnover, the enterprise has truly breathed a huge sigh of relief."
Since last year, affected by the macroeconomic environment and the contraction of bank credit, the difficulty for enterprises to obtain financing has further intensified, especially for small and medium-sized micro-enterprises. As the dominant industry of Longquan, how the automotive air conditioning parts enterprises can overcome difficulties and move forward relates to the goal of achieving a production value of over 15 billion yuan during the "12th Five-Year Plan" period.
Ye Weifeng, the president of the Automotive Air Conditioning Parts Industry Association and chairman of Innovation Automotive Air Conditioning Parts Co., Ltd., said: "In the past, enterprises could only rely on private lending to solve the problem of financing difficulties, which was not only risky but also very costly." In early August 2011, after multiple discussions and negotiations, the association officially submitted an application to the Longquan Civil Affairs Department to establish a professional committee for mutual assistance and support within the association.
"The committee formulated standardized and feasible regulations. According to these regulations, our company led the way by contributing 2 million yuan," said Ye Weifeng. His generous contribution inspired other council units, and within just one month, they raised 10 million yuan in mutual assistance funds, which began operations in December of the same year.
Longquan Nanxing Automotive Air Conditioning Co., Ltd. was the first beneficiary of the industry's mutual assistance fund. "At the time, we had an 800,000 yuan loan due on December 1st, but by November 29th, we still hadn't gathered enough capital for turnover. In a hurry, we could only seek help from the industry association. The mutual assistance fund was originally scheduled to start providing services on December 1st, but for our company, they opened a green channel and put it into use ahead of schedule," recalled Liu Jijun, the person in charge of the company, vividly expressing his immense relief and gratitude at receiving this "emergency money".
"After the enterprise submits an application, we first conduct a bottom-up investigation. If the conditions are met, the enterprise can receive up to 2 million yuan in financial assistance," introduced Ye Weifeng. From December last year to now, the mutual assistance association has cumulatively provided more than 40 million yuan in loan turnover funds to over 50 enterprises within the association.
Xintong Company, which settled in Longquan in 2009, values the excellent platform provided by the clustering development of Longquan's hardware and auto parts industries, and now benefits even more from the practical actions of the industry's "group warming". General Manager Ye Pinliang happily introduced that in 2011, the company's production and sales developed rapidly, reaching a total output value of more than 40 million yuan.
"In the next step, we also plan to expand the scope of fundraising, allowing other member enterprises with surplus working capital to participate as well," said Ye Biwen, the secretary-general of the Automotive Air Conditioning Parts Industry Association. While helping enterprises solve their capital turnover difficulties, there are plans to provide start-up funds for young people entering this industry, supporting new forces to accelerate industrial agglomeration and transformation and upgrading.
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