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Chinese Banks Relax Loan Terms to Fuel Tech Sector M&A Deals

Published: Mar. 18, 2025 12:52 a.m. GMT+8

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Several Chinese banks have handed out loans to support selected tech firms’ merger-and-acquisition (M&A) deals under a newly launched pilot program to improve access to credit for innovative businesses.

China Construction Bank, one of the country’s biggest state-owned lenders, has issued 190 million yuan ($26.3 million) in an M&A loan to a publicly listed tech firm in Suzhou, Jiangsu province, people familiar with the deal told Caixin.

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Chinese banks, under a new pilot program, support tech firms' M&A deals with improved credit access; China Construction Bank issued a significant loan in Suzhou, Jiangsu province.
The pilot program allows M&A loans to cover up to 80% of transaction costs with extended loan terms, aiming to bolster industrial integration and innovation.
Participating banks include China Construction Bank, China Citic Bank, Industrial Bank, and Bank of Beijing, supporting acquisitions across multiple cities and tech firms.

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Who’s Who

China Construction Bank: China Construction Bank, one of China's largest state-owned banks, issued a 190 million yuan ($26.3 million) M&A loan to a tech firm in Suzhou, covering 80% of the acquisition cost with an eight-year term. This marked the first such loan from a major state bank following new policies to support tech enterprises' M&A activities. The move is part of a pilot program to improve credit access for innovative businesses.

China Citic Bank: China Citic Bank, a leading joint-stock bank, participated in the pilot program by providing M&A loans to two private tech companies in Hangzhou and Hefei. These loans offered eight-year terms and covered 80% of the transaction costs, aligning with the program's goal to support tech firms in M&A activities.

Industrial Bank: Industrial Bank extended a 10-year loan to a listed tech company in Chengdu, financing 78% of the costs for an M&A deal. This is part of a pilot program aimed at improving access to credit for innovative tech firms, with a focus on facilitating mergers and acquisitions.

Bank of Beijing: The Bank of Beijing offered a 10-year loan to a Shanghai-based tech firm, covering 77.46% of the capital required for its M&A transaction. This is part of a pilot program to improve access to credit for innovative businesses, allowing tech firms to cover a significant portion of their M&A transaction costs with extended loan terms.

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What Happened When

Before March 2025：: Financial regulators eased M&A loan policies to help tech enterprises.

Early March 2025：: The National Financial Regulatory Administration (NFRA) launched a pilot program to encourage M&A loan issuance, extend loan terms, and increase allowable loan amounts relative to transaction value.

After Early March 2025：: China Construction Bank issued 190 million yuan in an M&A loan to a tech firm in Suzhou, covering 80% of an acquisition cost with an eight-year term, marking the first loan of this type by a large state bank under the new pilot program.

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