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Fixed assets such as property and manufacturing facilities are the most commonly used bank guarantees, but now Chinese companies are putting up less tangible assets to get bank loans - intellectual property rights (IPR). Earlier this month, Beijing Kery Bio-Pharm Company got a 1.5 million yuan (US$189,000) loan from the This is the first time the Bank of Communications has offered this kind of loan. The deal may be a boon for small- and medium-sized enterprises (SMEs), which are often unable to get bank loans due to a lack of valuable fixed assets. "This is the first-ever bank loan we've got since the company's establishment in the early 1990s," said Qi Qing, general manager of Kery Bio-Pharm. "The loan amount is small, but it is a breakthrough in that the commercial value of an intellectual asset is getting recognized," she said. The new loan offering is to help SMEs like Kery Bio-Pharm, which have valuable intellectual property rights get financed, said Zhang Xin, an official from the Bank of Communications. According to Zhang, SMEs of good credit, registered in Patents with a validity period of at least eight years, utility patents with a validity period of no less than four years, and profitable trademarks can be used as mortgage. The Bank of Communications said it has adopted a safe credit model. It offers loans based on IPR valuation by a partnering rating institution and the company's capital demands. The credit line for invention patents is under 25 percent of the valuation. For utility patents it is under 15 percent, and for trademarks it is less than 30 percent. "The new loan product got a warm welcome from SMEs," Zhang said. In the first three days after the bank launched the product, it received more than 150 applications. It is estimated that demand for IPR mortgage loans is around 80 billion yuan (US$10.1 billion) in Officials from the Bank of Communications said they will consider expanding the service to other cities if it develops well in Before the Bank of Communications, other commercial banks have tried to offer IPR mortgage loans. In September, the Industrial and Commercial Bank of Also in September, three companies, including the Maojia Restaurant in (
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