An alternative way of financing: Private capital lending in Wenzhou, Zhejiang Province

Private capital lending (PCL) is an emerging way of financing for startups and SMEs in China, especially in Wenzhou city. This paper introduces the current situation and mechanism of PCL, including the participants, contract, period and repayment. Besides, this paper also compares the PCL with some traditional ways of financing such as bank loans and VCs. Finally, this paper points out the existing risks of PCL and gives the recommendations.