Since the start of this year, Shanghai has issued about 580 guaranteed start-up loans, totaling around 1.33 billion yuan ($187.76 million). What's more, it has also provided interest subsidies for about 380 of these loans, amounting to 14.90 million yuan.

Since June this year, Shanghai has revised its implementation measures for guaranteed start-up loans, which include Guaranteed pre-start-up loans, guaranteed individual start-up loans and guaranteed organizational start-up loans.

Guaranteed pre-start-up loans

> The maximum amount does not exceed 4 million yuan in principle.

> For start-up organizations in leading and key industries that are in line with the city's industrial development direction, the maximum amount of guaranteed start-up loans is 5 million yuan.

> The loan term is up to two years.

> No guarantee fees are required.

> The interest rate is capped at the Loan Prime Rate plus 0.5 percent (≤LPR+0.5%).

I. Eligible applicants

1. Young university students with Shanghai household registration aged 35 or below.

2. Students currently enrolled in Shanghai's universities aged 35 or below.

3. Young non-local graduates from Shanghai's universities aged 35 or below, who hold a Shanghai Residence Card, a Residence Permit for Hong Kong, Macao and Taiwan Residents, a Residence Permit for Overseas Talent or a Foreign Permanent Resident ID Card.

II. Application requirements

1. The applicant must have no negative credit records that affect their ability to repay the loan.

2. The applicant must not be listed as a dishonest person subject to enforcement by the court.

3. If the applicant is currently enrolled at a university in Shanghai, they must obtain a recommendation from the university's entrepreneurship guidance and services department.

4. The applicant must have a relatively complete and feasible start-up project plan.

III. Interest subsidy

Borrowers who repay the loan principal and interest on time (including early repayments) can apply for an interest subsidy. Guaranteed pre-start-up loan borrowers must establish start-up organizations in the city within the loan term, such as small and micro-sized enterprises, private non-enterprise bodies, farmers' cooperatives, or individual businesses.

For eligible guaranteed start-up loans, the government finance department provides an interest subsidy covering 50 percent of the actual loan interest rate.

Guaranteed individual start-up loans

> The maximum amount is capped at 500,000 yuan.

> The loan term is up to three years.

> Neither collateral nor guarantee fees are required.

> The interest rate is capped at the Loan Prime Rate plus 0.5 percent (≤LPR+0.5%).

I. Eligible applicants

> Local workers with Shanghai household registration;

> Non-local workers who hold a Shanghai Residence Card, a Residence Permit for Hong Kong, Macao and Taiwan Residents, a Residence Permit for Overseas Talent, a Foreign Permanent Resident ID Card or has obtained preferential qualifications recognition for starting a business in Shanghai as returned overseas students;

> Start-up organizations in Shanghai, such as small and micro-sized enterprises, individual businesses, farmers' cooperatives and private non-enterprise bodies.

II. Application requirements

1. The applicant must not have any negative credit records that affect their ability to repay the loan.

2. The applicant must not be listed as a dishonest person subject to enforcement by the court.

3. The start-up organization established by the applicant must implement an accounting and financial management system and register for taxation in accordance with the law.

4. The start-up organization established by the applicant who does not belong to the Key Employment Groups (see definition below) must employ local workers and meet one of the following conditions:

> Within one year prior to the application for the guaranteed start-up loan, the number of newly hired Key Employment Groups members must account for at least 10 percent of the organization's current workforce (for organizations with more than 100 employees, this must reach 5 percent).

> The proportion of local workers employed must be no less than 15 percent (for organizations with more than 100 employees, no less than 8 percent).

5. When an applicant (excluding recent college graduates aged 35 and under in Shanghai) submits the application for guaranteed start-up loans, neither the applicant nor their spouse should have any other loans – except for student loans, poverty alleviation loans, housing loans, car loans and small consumption loans under 50,000 yuan (including credit card spending).

Key Employment Groups

The Key Employment Groups here include retired military personnel, recent college graduates aged 35 and under, urban registered unemployed individuals and those facing employment challenges.

III. Interest subsidy

Borrowers who repay the loan principal and interest on time (including early repayments) can apply for an interest subsidy.

For eligible guaranteed start-up loans, the government finance department provides an interest subsidy covering 50 percent of the actual loan interest rate.

Guaranteed organizational start-up loans

> The maximum amount is capped at 200,000 yuan.

> The loan term is up to one year.

> Neither collateral nor guarantee fees are required.

> The interest rate is capped at the Loan Prime Rate plus 0.5 percent (≤LPR+0.5%).

I. Eligible applicants

Small and micro-sized enterprises, private non-enterprise bodies and farmers' cooperatives registered and operating in Shanghai.

II. Application requirements

1. The start-up organization must implement an accounting and financial management system and register for taxation in accordance with the law.

2. Both the applicant and the organization's legal representative must not be listed as a dishonest person subject to enforcement by the court and must not have any negative credit records that affect their ability to repay the loan.

3. The start-up organization must employ local workers and meet one of the following conditions:

> Within one year prior to the application for the guaranteed start-up loan, the number of newly hired Key Employment Groups members must account for at least 10 percent of the organization's current workforce (for organizations with more than 100 employees, this must reach 5 percent).

> The proportion of local workers employed must be no less than 15 percent (for organizations with more than 100 employees, no less than 8 percent).

III. Interest subsidy

Borrowers who repay the loan principal and interest on time (including early repayments) can apply for an interest subsidy.

For eligible guaranteed start-up loans, the government finance department provides an interest subsidy covering 50 percent of the actual loan interest rate.

Other provisions

Extended, overdue guaranteed start-up loans or new loans taken to repay old ones will not be subsidized. For applications to renew loans without principal repayment, interest subsidies will only be granted for renewals where both the principal and interest are repaid on time (including early settlement).

A borrower can receive interest subsidies no more than three times.

Partnership start-up

For Key Employment Groups engaging in a partnership start-up, the loan amount may be accordingly increased based on the number of Key Employment Group members in the body. The maximum loan amount should not exceed 110 percent of the combined upper limit of eligible guaranteed individual start-up loans and it should not exceed the upper limit of the guaranteed organizational start-up loans.

 

Sources: Jiefang Daily, Official WeChat account of the Shanghai Municipal Bureau of Human Resources and Social Security