Many of us love going to restaurants, salons, clothing stores, and other small and medium-sized businesses. While a lot of them make great money, there comes a time when they need to borrow money for upgrades, repairs and the like. For years, such businesses in China have found it very difficult to get loans. But fresh new ideas are changing things.

In the past, commercial banks have declined loans for small and medium enterprises (SMEs) based on insufficient collateral and difficulties to assess credibility. 

So, when Li Xin, manager of Oula Hot Pot, badly needed money to renovate his restaurant this summer, he tried applying for a loan at a local commercial bank. Knowing how tough it's always been for China's SMEs to get funding, Li's first reaction was well-warranted. 

"I didn't expect to get the loan at all. Surprisingly, it took only a few minutes on my mobile phone to get one million yuan (about 142,060 U.S. dollars)," Li Xin said.  

Xu Junfeng, a manager of Inclusive Finance Department of China Construction Bank, explained the process. "We developed platforms that connect all their credit information together such as their bank credit, tax bills, and electricity bills. If all of it passes, it will take only an hour to open an account and a few minutes to receive the loan on the app.” 

Today, technologies like big data are widely used for financial products and services, helping banks managing loan risks. It is becoming a trend for SMEs to get funding via their credit instead of collateral. 

Dong Fujun, a deputy director of the Inclusive Finance Department of Henan Provincial Banking and Insurance Regulatory Commission, said, "We want to create an even bigger database and provide more credit information on it. Now, we have already integrated 150 such financial products from 24 commercial banks."

China has made remarkable improvements in providing financial support for SMEs, which are companies with less than 300 workers and total assets under 50 million yuan. The Central Bank indicated that as of late September, outstanding inclusive loans for SMEs reached 16 trillion yuan nationally, up 16.8 percent year-on-year.