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Coronavirus

Coronavirus drives Chinese business owners into personal debt

Corporate loans from banks still a bridge too far for millions of SMEs

Workers wearing face masks sort and package eggs at a factory in China's Shandong Province on Feb. 18.   © Reuters

HONG KONG -- As orders from Europe and the Middle East dried up due to the coronavirus, Ye Zhenqing knew he would have to take drastic measures to keep his sunglasses manufacturing business from going under. With corporate loans out of reach, Ye pledged his own apartment as collateral for a 2 million yuan personal loan to tide his company over.

"I am extremely cash-strapped right now. It's difficult to apply for a bank loan," said Ye, the founder and CEO of Wenzhou Zhen Qing Eyewear, in the eastern city of Wenzhou. Special low-interest business loans have been introduced to help companies deal with the impact of the coronavirus, but "they don't apply to us," Ye said, adding that small businesses like his have to put up huge amounts of collateral and pay higher interest rates than big companies.

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