Small, mid-sized companies turn to pawnshops for loans

BEIJING - Small- and medium-sized companies in China are turning to pawnshops for quick and easier money-borrowing services, even at much higher costs, as they are finding it difficult to get bank loans due to tight lending policies.

The central bank's move to raise the benchmark interest rate made it harder for the small- and medium-sized companies to borrow money from banks, and this is providing a boost for the pawnshops, Han Li, a legal adviser from Beijing Pawn Trade Association, told China Daily.

Many small- and medium-sized companies pledge cars as well as real estate, including offices, shops and factories, to resolve short-term cash-flow problems.