Zhongguancun Science-tech Leasing Company, a state-owned financial enterprise affiliated with the Zhongguancun Development Group, reported its performance over the previous two years during a press conference in Beijing on Dec 2.
As the first domestic science-tech leasing company, it is dedicated to solving the financing problems of high-tech small and medium-sized enterprises (SMEs).
Founded in November 2012, the company has signed a total of 128 projects with rentals amounting to 2.45 billion yuan ($398 million). Over 90 percent of its customers are SMEs in Zhongguancun.
The company plans to spend 8-10 billion yuan on 350-500 SMEs covering electronic information, life health, energy saving and environmental protection, new energy and other high-tech industries from 2014 to 2016. It will help build a number of brand enterprises in each industry.
SMEs around the world are facing a common problem of getting financing; however, Zhongguancun Science-tech Leasing Company has explored an effective way of providing financing services to tech SMEs.
The company has made full efforts to help enterprises reduce the time and cost of financing. At present, SMEs undertake 8 to 9 percent of the actual financing costs on average and the approvals only take 20 working days with a financing period of two to three years.
Meanwhile, the company also provides business consulting, legal services and a series of intimate services to help customers gain better trading conditions and reduce transaction costs.
"With the platform of Zhongguancun Development Group, we mainly provide rental services of R&D, production, testing and other equipment and financing services for Zhongguancun tech SMEs. We help those enterprises to solve financing problems and provide a new financial tool to promote the transformation and upgrading of Beijing's industrial structure," said Sheng Zijin, chairman of Zhongguancun Science-tech Leasing Company.
"Leased property (equipment) can be regarded as collateral, so enterprises don't need to provide standard collateral such as housing and land. It helps reduce entry thresholds and the cost of financing," said He Rongfeng, general-manager of the company.
Helping SMEs with funds
Beijing Yonder Environment Technology Co is a Zhongguancun enterprise focusing on investment, construction and operation of energy-saving emission reduction projects. It faced financial difficulties when expanding markets in 2013. Zhongguancun Science-tech Leasing Company leased 84 million yuan support funding for the company, which helped its net profits rise from 16 million yuan to 30 million yuan.
Beijing Sunheart Simulation Technology is a high-tech enterprise producing high-end driving simulators at a high price. In 2013, Zhongguancun Science-tech Leasing Company provided 100 million yuan credit to the company, which helped it expand the civilian market.
Controlling business risks
The company mainly serves growing tech SMEs with certain risks, which don't have much standard collateral, thus a better control of the lease financing business risk is very important. It has built a new risk control system covering organization, rules, team, incentive and constraint mechanism, and service for rapid expansion.
So far, the company has improved services for 30 SMEs and received a good response.
Taking a leading role in financial innovation
In recent years, with the development of different financing modes, including financial leasing, equity financing, venture investment, credit and intellectual property loans, Zhongguancun is taking a leading role in financial innovation. It aims to develop into a national science and technology financial innovation center and help tech SMEs to take off.
