China Lets Builders Use Pre-Sale Funds to Ease Cash Crunch

(Bloomberg) — China gave embattled real estate developers a boost Monday by allowing them access to more money held in pre-sale accounts, the biggest source of funds for the cash-strapped builders.

China will give “quality” property developers access to as much as 30% of the pre-sale funds with letters of guarantee from banks, according to a statement posted on the banking and insurance regulator’s website. The funds are money that home buyers paid to developers in advance of their property being built and are generally held in an escrow account.