This article is reprinted from: Valve Network http://www-famen.cn
Abstract: To prevent the economy from shifting from rapid growth to overheating and suppress the "three excesses", the Central Economic Work Conference proposed that this year a "prudent fiscal policy" and a "tight monetary policy" will be implemented. The banks tightening the funding valve will first affect small and medium-sized enterprises in overheated industries.
Car Dealers - Tightening of Working Capital Loans
"This year, the country will implement a tight monetary policy, which will create enormous pressure on car dealers' cash flow," said Vice General Manager Sang Ruilin of Beijing Yechuan Shanghai Volkswagen Sales and Maintenance Center, who was already considering at the start of 2008 how the company could reasonably configure inventory, accelerate capital turnover, and respond to changes in macroeconomic policies.
In 2007, Yechuan's sales performance approached 5,000 units. Apart from a small portion of down payments coming from corporate own funds, the other approximately 6 billion yuan for purchasing cars all relied on financing. Currently, Yechuan's credit limit is 1 billion yuan, rolling over every three months, with very good bank credit records. This can be attributed to the marketing reform promoted by Shanghai Volkswagen in 2005. Now, Shanghai Volkswagen has transitioned from production-oriented to market-oriented, changing the evaluation criteria for dealers from wholesale volume to direct sales volume, making inventory management stricter. Car dealers are forced to study and predict the market, improving the accuracy of reserved models. Although it's difficult, the improvement in model turnover speed is evident. Currently, Yechuan's inventory is only about 400 units, equivalent to one month's sales volume. In the past, inventories reached up to thousands of vehicles."
Sang Ruilin stated that currently commercial bank loans haven't tightened yet, and loans from the Volkswagen Finance Company, which account for 20% of Yechuan's total financing, are also normal. The company hasn't directly felt the pressure of tightened monetary policy. Nevertheless, like most small and medium-sized dealers, Yechuan still has concerns about this year's market. Therefore, how to prepare in advance and work on reasonably configuring inventory and improving capital turnover efficiency becomes very important.
Small and Medium-sized Real Estate Enterprises - Facing the Fate of Mergers and Acquisitions
In recent months, Fang Mingli, chairman of Xiangjiang Weiye (Beijing) Investment Co., Ltd., has been extremely busy. Now, developers are finding it increasingly difficult to secure money from banks, some small projects are really struggling to continue, and with the decline in real estate transaction volumes, the negotiation process for several real estate projects the company plans to acquire has accelerated. Acquiring stalled projects from some small and medium-sized companies is Xiangjiang Weiye's main way of acquiring land and conducting real estate development. Due to last year's continuous rise in housing prices and good market expectations, the other party demanded high prices, causing delays in negotiations for several projects the company had its eye on.
Fang Mingli believes that an appropriately tight monetary policy will significantly impact real estate companies that originally relied on bank loans for large-scale development. Especially for small and medium-sized enterprises, obtaining loans from banks will become increasingly difficult, and acquiring land through bidding will also become more challenging. Some ongoing projects may be forced to stop due to financial pressure. Projects or even entire companies will face the fate of being acquired. It can be foreseen that as the monetary policy continues to tighten, mergers and acquisitions in the real estate industry will intensify, many small companies will be swallowed up, the number of developers will greatly decrease, and industry concentration will further increase.
Technology-based Small and Medium-sized Enterprises - Starting to Seek New Financing Channels
Three months ago, they were confidently ensuring that 1.1 billion yuan of infrastructure funds would be in place, but when it came time to officially process the loan after the New Year's Day, the bank only agreed to lend 150 million yuan. At the start of the new year, Guangzhou Yangpu Medical Science and Technology Co., Ltd. received a "cold shoulder" from the bank.
As a well-known technology-based small and medium-sized enterprise in Guangzhou, Yangpu Medical currently produces 500 million proprietary intellectual property vacuum blood collection tubes and 200 million vacuum blood collection needles annually, with a production value close to 2 billion yuan. The company has experienced rapid development at over 100% per year for six consecutive years. Last year, Yangpu Medical obtained precious production and development land in Guangzhou Science City and prepared to build a high-standard, high-capacity R&D and production base. According to Yangpu Company's plan, the budget for the preliminary construction of factories and R&D buildings is over 400 million yuan, with various equipment investments nearing 700 million yuan. Currently, design, reporting, and various procedures have all been completed, and preliminary construction has begun. Unexpectedly, it was precisely at this time that the loan encountered problems.