What is the duration of the working capital loan? "Can a working capital loan last for five years?"

The explanation of working capital loan is: working capital loan is a loan issued to meet the short-term capital demand of producers and operators in the process of production and operation and ensure the normal production and operation activities. According to the loan term, it can be divided into short-term working capital loans within one year and medium-term working capital loans with a term of one to three years.

In short, working capital loans can be divided into short-term working capital loans within one year and medium-term working capital loans with a term of one to three years.

In addition to the different loan terms, there are also differences in the following aspects.

(1) Loan repayment method

Short-term working capital loans within one year mainly use monthly/quarterly repayment of interest and repayment of principal at maturity. Medium-term working capital loans with a term of one to three years generally pay interest on a monthly/quarterly basis, and a repayment plan is made according to the borrower's cash flow, and the repayment method is generally once every six months.

(2) Borrower's qualification

Because the loan term is different, the debtor bears different risks. Often, the longer the borrowing time, the greater the uncertainty of the borrower's operation and the higher the debt risk. Therefore, for customers who make medium-and long-term loans, there are higher requirements for their operation, financial indicators, guarantee methods, enterprise competitiveness, upstream and downstream customer stability, credit rating and so on. Under normal circumstances, for small and micro enterprises, short-term working capital loans are the main ones. Medium-term working capital loans are aimed at enterprises with normal production and operation, large production scale, marketable products, benefits and credibility, and guaranteed repayment of loan principal and interest, mainly government platforms, large and medium-sized state-owned enterprises, listed companies and large and medium-sized foreign-funded enterprises.

(3) Loan interest rate

At present, bank loans are mainly quoted by lpr, and the current one-year lpr interest rate is 3.85%; The 5-year lpr interest rate is: 4.65%. Short-term working capital loans and medium-term working capital loans are priced at one-year lpr, but according to the pricing situation of the Bank and some interbank banks, the loan interest rate of medium-term working capital loans will be 0.3%- 1% higher than that of short-term working capital loans. At the same time, because the current bank loans are mainly floating interest rates, the floating period is generally 1 year, and the loan interest rate of medium-term floating loans will fluctuate with the change of lpr.

Finally, I would like to remind you that the purpose of working capital loans is to supplement the working capital of enterprises and shall not be used for fixed assets, equity and other investments. So you can't use working capital loans to buy land, factories, machinery and equipment.