The National Financial Regulatory Administration recently initiated a pilot program to moderately relax merger and acquisition (M&A) loan policies for technology companies, with Xiamen and 17 other cities selected to participate. The authority conducted in-depth research into the financing challenges encountered by technology companies and identified key issues. As part of the pilot, certain provisions of the Guidelines on the Risk Management of M&A Loans of Commercial Banks will be relaxed to facilitate the growth of technology companies. Specifically, for "controlling stake" acquisitions, the loan-to-transaction ratio limit has been increased from "no more than 60%" to "no more than 80%," and the loan term has been extended from "generally not exceeding seven years" to "generally not exceeding ten years".
