A relending policy unveiled by the People's Bank of China (PBOC), China’s central bank, has eased funding pressures for private enterprises, providing vital support for business growth.

This year, the PBOC has established a new one trillion yuan (about 142.72 billion U.S. dollars) relending facility for private enterprises, and the policy has been effectively implemented across various regions. By the end of April, the outstanding balance of relending loans to private enterprises had exceeded 600 billion yuan.

A compressor manufacturing enterprise in Chongqing is among those that have benefited from the policy.

According to the company's head, procuring raw materials requires substantial working capital, and a lengthy payment collection cycle has created a pressing demand for medium- and long-term credit funds.

"Payment collection usually takes over six months, and new products take more than a year to go from research and development to production. In the past, the loan terms we obtained were mainly within one year, which could hardly meet our funding needs. So, we've long needed three-to-five-year loans," said He Lei, financial manager at Chongqing Shunduoli Locomotive Co.

To address financing obstacles faced by private manufacturers, the PBOC Chongqing Municipal Branch has compiled a white list of micro, small and medium-sized private enterprises and guided financial institutions in the region to set up "green lanes" for their loan review.

"Supported by the relending policy, we assessed the company's full-cycle capital needs, including raw material procurement, production turnover and equipment upgrades, and developed a financing plan that better fits the company's requirements," said Yang Ning, branch chief at Bank of Chongqing’s Pilot Free Trade Zone office.

"We received 18 million yuan in funding within about a month. We quickly put it into small-batch production. We expect the new products and new production line to generate about 40 million yuan in output value for us this year," said He.

The PBOC Chongqing Municipal Branch has also guided local corporate banks to lower financing costs for private enterprises.

"By the end of April, the relending facility had helped drive 44.27 billion yuan in loans to micro, small and medium-sized private enterprises across Chongqing, benefiting more than 8,400 business entities," said Wen Jiangyong, deputy governor of the PBOC Chongqing Municipal Branch.