As more Chinese people turn from employees to employers, sufficient capital is vital to keep their business operations running. Let us explain why pawn houses can be more helpful than banks for these entrepreneurs.

Mr. Cui owns a clothing company. He recently needed money urgently for his turn over. He applied for a small loan from a few banks but was told the loan would take some time to process.

Then he was recommended by a friend to a pawn house. The pawn house took Mr. Cui's property as guarantee and lent him 1 million yuan within 3 days.

Mr. Cui said "I just needed to borrow some money for short-term turn-over. Banks only offer one-year loans. If I return the loan within one year, they still charge one year interest. Here at the pawn house, I pay much less interest."

Mr Cui is one of many emerging small private company owners demanding short-term financing. Pawn houses are winning customers from banks with fast-processing and flexible interest rates. Cars, properties and investments like stocks can be taken as guarantees.

Yang Jinkun, Deputy General Manager of Pawn House, Beijing said "80 percent of our loans are issued to private companies for short-term turn-over."

Experts say banks often neglect such borrowers because the loans are small, but cost as much time and effort to examine and monitor as big long-term loans. For small and short-term financing, pawn houses do have advantages.

(CCTV July 15, 2009)