Is it difficult for small and medium-sized enterprises to obtain loans? This court in Shanghai offers practical solutions to difficult problems, as long as you become the defendant company | Information | Court
Due to this case, our company's application for a loan from the bank has been restricted. We now have a letter of explanation issued by the court, and we believe that this issue can be resolved. Recently, in response to the application of a construction company in Shanghai, the Baoshan District People's Court in Shanghai issued a "Letter of Explanation on Enterprise Litigation Information", which is stamped with the court's official seal and records in detail the basic litigation information of the enterprise's litigation case, including the filing time, litigation subject, litigation request, defense opinion, etc.
This is a new measure recently launched by Baoshan Court to optimize the business environment. Baoshan Court found in its research that once small and medium-sized enterprises become defendants, the information involved in the lawsuit will be captured by third-party institutions and pushed to financial institutions. Even if the amount is small and has little impact on business operations, there are still many restrictions when applying for loans, participating in bidding, and other aspects, which make operators complain incessantly.
Financial institutions also have difficulties. They must understand the current business situation of the enterprise when lending, and when the case is still in the trial stage, third-party institutions often cannot provide complete and accurate information. The objectivity and authenticity of the information submitted by the sued enterprise cannot be guaranteed. So, when facing small and medium-sized enterprises with litigation related information, financial institutions can only adopt a more cautious attitude.
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After fully understanding the demands and concerns of both parties, Baoshan Court has decided to take the initiative to explore the establishment of a service mechanism to provide information explanations for the involved enterprises. In the commercial cases accepted by the court, if the defendant is a small and medium-sized enterprise, the court will also send the "Notice on Providing Litigation Information Explanation Services for the Litigation Enterprise" along with the litigation materials. If a small and medium-sized enterprise involved in a lawsuit encounters difficulties in credit financing, bidding, and other business activities due to incomplete acquisition of the lawsuit information by relevant units, and requires the court to objectively explain or clarify the lawsuit information, it may send an application to the court. After receiving it, Baoshan Court will issue an explanatory letter based on the situation.
The system came into effect in June this year. Currently, Baoshan Court has issued notices to dozens of small and micro enterprises involved in litigation, and recently issued explanatory letters for the first time. "We are a nationally recognized high-tech enterprise and small and micro enterprise, and have been sued as defendants in a supply dispute with a technology company in Guangdong. The disputed amount in this case is not significant, and both parties are actively negotiating," said Ms. Tong, the financial manager of a construction company in Shanghai. However, due to the information involved in the lawsuit, the company encountered difficulties when applying for a normal operating loan from the bank. After seeing the notice attached to the response materials, we submitted the corresponding application as required. "After about a week, we received the explanation letter and submitted it to the bank.".
"The explanatory letter records relevant information about the case so far, including the plaintiff's lawsuit request, the defendant's defense, etc. These information do not represent the court's views on this case, but mainly provide a reference for financial institutions to minimize the financing and bidding difficulties caused by information asymmetry for small and medium-sized enterprises involved in the lawsuit," said Xu Ziliang, Vice President of Baoshan Court.
![Is it difficult for small and medium-sized enterprises to obtain loans? This court in Shanghai offers practical solutions to difficult problems, as long as you become the defendant company | Information | Court](https://a5qu.com/upload/images/a5e1ddbebe3ec0dec35e0e08cbc9563b.jpg)
Financial institutions also welcome this new system. Recently, Baoshan Court invited representatives from 9 bank branches located in Baoshan District to attend a meeting, introducing them to the specific operations of issuing an explanatory letter and soliciting opinions and suggestions. Representatives from multiple banks believe that the litigation information provided by the court is more accurate and authoritative than that of third-party institutions, which is meaningful for banks to fully grasp the operational status of enterprises and reduce loan risks.