Lao Qian works industrial-equipment finance leasing at a leasing company; most of his customers come through equipment dealer referrals — a factory has its eye on a machine, can't scrape the cash together right away, and the dealer pulls him in. This year the first question customers ask has become: "There's an interest subsidy on bank loans now, so how do your lease payments compare?" He went back through the deals he's closed over the past few years, and the ones that closed easiest were mostly small and mid-sized factories that had been running for a decade or more, whose old equipment was due for replacement, and whose cash was tight. He decided to build his own list of factories like that and start calling.
Timing first: the equipment upgrade loan interest subsidy runs through December 31, 2026
Three documents are directly relevant to equipment finance sales.
- The master plan: In March 2024 the State Council issued the Action Plan for Large-Scale Equipment Upgrades and Consumer Goods Trade-ins (Guofa [2024] No. 7), which calls for equipment investment in industry, agriculture, construction, transport, education, culture and tourism, and healthcare to grow by more than 25% by 2027 compared with 2023. The financial-support section states: use relending as a policy tool to guide financial institutions toward stronger support for equipment upgrades and technological renovation; the central government will provide interest subsidies for bank loans that qualify for relending reimbursement.
- Relending: In April 2024, the People's Bank of China and five other agencies set up the Sci-Tech Innovation and Technological Upgrade Relending facility, with a quota of 500 billion yuan, of which 400 billion yuan is earmarked to incentivize financial institutions to issue loans for technological-renovation and equipment-upgrade projects; the annual interest rate is 1.75%, the term is 1 year, and it can be rolled over twice. For qualifying loans, the PBOC relends to financial institutions at 60% of the loan principal. On May 7, 2025, the PBOC added a further 300 billion yuan in quota, bringing the total to 800 billion yuan, and stopped splitting it into the two designated uses.
- Interest subsidy: On January 19, 2026, the Ministry of Finance, National Development and Reform Commission, People's Bank of China, and National Financial Regulatory Administration jointly issued the Notice on Optimizing the Fiscal Interest Subsidy Policy for Equipment Upgrade Loans (Caijin [2026] No. 2), effective from January 1, 2026. An earlier version was issued in 2024 (Caijin [2024] No. 54); where the two documents differ, this year's version governs.
The two key sentences in the interest-subsidy document, verbatim, are: "Where a business entity carries out an equipment-upgrade action and a bank extends it a loan, the central government will subsidize the interest on the principal of the fixed-asset loan related to the entity's equipment-upgrade project by 1.5 percentage points, calculated from the date the fixed-asset loan is disbursed, for a subsidy period not exceeding 2 years." "The policy is implemented through December 31, 2026, and the implementation period may be extended later as circumstances warrant." The same document also states: "The fiscal interest subsidy is no longer conditioned on the loan having obtained relending support."
You can work this out for the boss on the spot. Say a factory takes out a 3-million-yuan loan to upgrade equipment: at a rough estimate of 1.5 percentage points subsidized per year on an unchanged 3-million-yuan principal, 3,000,000 yuan × 1.5% = 45,000 yuan, so the factory pays 45,000 yuan less interest in a year, and up to 90,000 yuan less over two years; if the principal is repaid monthly, the actual amount subsidized will be somewhat lower.
The same document is used differently by the two kinds of salespeople:
- If you sell equipment loans: this is the most ready-made opening line this year. Stick to what the document actually says — "implemented through December 31, may be extended later as circumstances warrant" — and stop there. Don't embellish the policy, and don't push for a signature with "it's gone once the year turns."
- If you sell finance leasing: the document specifies "a bank extends it a loan," and what's subsidized is "the principal of the fixed-asset loan." Once a customer has heard about the interest subsidy, they'll use it to benchmark your lease payments. Get ahead of it — lay out the down payment, the documents required for approval, the monthly outlay, and who owns the equipment at the end of the term for both options in one table, and let the boss compare them himself. The best customers for a leasing proposal are factories whose bank loan won't get approved, whose credit line isn't big enough, or who want to keep their bank credit line free for working capital.
Today is September 28 — a little over three months from December 31. Every step from selecting equipment and comparing prices to signing the contract and disbursing funds takes time, so the list needs to go out now.
Where the list comes from: 61,000 small and mid-sized factories with heavy equipment spending
On Tianxia Gongchang I picked 7 manufacturing industries with heavy equipment spending: metal products (including metal-processing machinery), general equipment, special-purpose equipment, plastic products, printing, textiles, and electronic components and electronic materials. I added three more conditions: registered capital of 1–10 million yuan, 20–299 insured employees, and at least 3 years in business. Active factories meeting all these conditions come to 61,053 in total.
| Industry | Factories |
|---|---|
| Metal products & machining | 19,674 |
| General equipment | 17,871 |
| Special-purpose equipment | 12,440 |
| Plastic products | 11,713 |
| Textiles | 5,497 |
| Printing | 4,005 |
| Electronic components & electronic materials | 3,231 |
(A factory can belong to more than one industry, so the industries sum to 74,431, more than the 61,053 total.)
By years in business:
| Years in business | Factories | Share |
|---|---|---|
| 3–10 years | 14,593 | 23.9% |
| 10+ years | 46,460 | 76.1% |
More than three-quarters of these factories have been in business for 10+ years. The longer a factory has been running, the more likely its early-purchased equipment is due for replacement, and the more complete the operating record it can show a risk-control team. The 14,593 factories that are 3–10 years old are more likely to be in an equipment-adding, capacity-expanding phase.
The three conditions are just a starting line I drew; if your risk-control standards are stricter or looser, adjust them accordingly:
- Registered capital of 1–10 million yuan: for a factory that's too small, a single equipment payment eats up too large a share of its net worth, which risk control finds hard to approve; for a factory that's too large, it likely already has a stable bank credit line, and your proposal will have to compete with the bank head-on. Note that registered capital is mostly a subscribed (not paid-in) figure — use it only for a rough tier, and check the bank statements and financial reports for actual repayment capacity.
- 20–299 insured employees: this means a formed production line and a stable workforce, so the impact of swapping in a new machine on output is visible; at this size, decisions on equipment and money are basically made by the boss alone, so the decision chain is short.
- At least 3 years in business: factories younger than 3 years have little operating record to show, so set them aside for now.
Where the factories are: Guangdong, Zhejiang, and Jiangsu account for 65%
| Province | Factories |
|---|---|
| Guangdong | 17,538 |
| Zhejiang | 11,689 |
| Jiangsu | 10,698 |
| Shandong | 3,598 |
| Fujian | 2,235 |
| Shanghai | 2,025 |
| Sichuan | 1,822 |
| Hebei | 1,714 |
| Anhui | 1,433 |
| Chongqing | 1,279 |
Guangdong alone has 17,538 factories, 28.7% of the total; Guangdong, Zhejiang, and Jiangsu together have 39,925, or 65.4%.
Ranked by city, the top eleven prefecture-level cities are Dongguan with 5,451, Suzhou with 4,432, Shenzhen with 3,390, Ningbo with 3,020, Foshan with 2,581, Wuxi with 2,257, Taizhou with 1,641, Jinhua with 1,433, Wenzhou with 1,425, Zhongshan with 1,377, and Hangzhou with 1,282. Shanghai is counted as a whole municipality, as shown in the table above.
A few things worth noting:
- Dongguan alone has 5,451 factories — more than Shandong's entire provincial total of 3,598 — accounting for 8.9% of this whole national group of factories. Dongguan, Suzhou, and Shenzhen together have 13,273, more than one-fifth.
- Guangdong's factories are concentrated: Dongguan, Shenzhen, Foshan, and Zhongshan together have 12,799, or 73.0% of the province's total.
- Zhejiang's factories are spread across five cities: Ningbo, Taizhou, Jinhua, Wenzhou, and Hangzhou together have 8,801, or 75.3% of the province's total — a good fit for working the list city by city.
Both leasing and lending require on-site due diligence, so the more concentrated the factories are, the more you can visit in a day.
Four things to nail down on the first call
1. Whether there's a plan to replace or add equipment in the next year
What they'd replace, how many units, and roughly how much it would cost. If the customer can't name a specific machine, note it down and follow up quarterly; only move to the proposal stage once they can name the equipment model and the budget. Replacing equipment is itself a demand window — for how to keep tracking signals like this, see Lesson 7 of the methodology: When factories are most likely to buy — tracking 6 demand-window signals.
2. Whether they're buying new equipment or unlocking cash from equipment they already own
Buying new equipment goes through direct leasing or a loan, and requires three-way coordination with the equipment supplier; a factory that already owns equipment and wants to free up cash for working capital goes through a sale-and-leaseback. This question decides which direction the proposal takes.
3. Which bank they currently work with, and whether they've heard of the equipment-upgrade interest subsidy
If the customer is already discussing a subsidized loan with a bank, a loan salesperson needs to compete on approval speed and credit limit, and a leasing salesperson needs to bring out that comparison table. If the customer hasn't heard of it at all, Caijin [2026] No. 2 is your opening line.
4. How long it takes for payments to come in, and which months of the year are tightest for cash
A small or mid-sized factory's cash flow follows its orders. Once you know the collection cycle and the slow and busy seasons, you can time the repayment or lease schedule to match the customer's own cash-collection pattern. While you're at it, find out who on the finance side does the numbers — next time, try to get the boss and the finance person in the room together.
A sequence you can run right away
- Pick your cities first: start with the highest-count cities — Dongguan, Suzhou, Shenzhen, Ningbo, Foshan — and choose the ones where your company has a branch and can do on-site due diligence.
- Pull the list on Tianxia Gongchang: filter by the 7 industries plus registered capital, insured headcount, and years in business, and call the ones with the biggest scale and longest history first. Take Dongguan as an example — you can go straight to these seven types of Dongguan factories with 1–10 million yuan in registered capital, 50+ insured employees, and 10+ years in business. Tianxia Gongchang has direct contact details for the owner or decision-maker at more than 3 million factories — check "Decision-maker contact details: yes" and the call goes straight to the person who signs off.
- Use two different pitches by years in business: for factories 10+ years old, open with "your old equipment is due for replacement, and the interest subsidy currently runs through year-end"; for factories 3–10 years old, open with "add equipment to expand capacity without tying up working capital."
- Trade leads with equipment-vendor salespeople: salespeople selling air compressors, forklifts, ERP, and MES are chasing the same factories, and the deals they're working often just need one more piece of equipment financing to close. For how to find factory customers for these equipment categories, see three other articles in this volume: Finding factory customers for air compressor and compressed-air station energy-saving retrofit sales, Finding factory customers for forklift and warehouse material-handling equipment sales, and Finding factory customers for ERP, MES, and other industrial software sales.
- Work backward from year-end: run through the list once in October and pick out the factories that can name their equipment and budget; get the proposal and quote in front of the boss and finance by the end of November.
You can also just ask the AI on Tianxia Gongchang a single question — "Suzhou general-equipment and special-purpose-equipment factories with 1 to 10 million yuan in registered capital, 20 to 299 insured employees, and 3+ years in business" — and it will break the conditions into filters and list the factories out.
A little over three months left until December 31
Per the text of Caijin [2026] No. 2, the equipment-upgrade loan interest subsidy currently runs through December 31, 2026, and may be extended later as circumstances warrant. Counting from today, that's a little over three months away.
Open the list you already have and count: how many factories on it are considering replacing equipment? And for how many do you already know what they'd replace, how many units, and what the budget is?
→ Filter Tianxia Gongchang for these seven equipment-heavy factory types with 1–10 million yuan in registered capital, 50+ insured employees, and 5+ years in business | → Get a Tianxia Gongchang membership
Published by the Tianxia Gongchang Research Institute. Data notes: factory counts are from Tianxia Gongchang, scoped to active manufacturing factories, as of September 2026; the equipment-upgrade action targets and financial support are from the State Council's Action Plan for Large-Scale Equipment Upgrades and Consumer Goods Trade-ins (Guofa [2024] No. 7, March 2024); the Sci-Tech Innovation and Technological Upgrade Relending facility is from the PBOC and five other agencies' Notice on Establishing the Sci-Tech Innovation and Technological Upgrade Relending Facility (Yinfa [2024] No. 72, April 2024) and the PBOC's announcement of an increase to the relending quota (May 7, 2025); the loan interest-subsidy policy is from the Ministry of Finance, National Development and Reform Commission, People's Bank of China, and National Financial Regulatory Administration's Notice on Optimizing the Fiscal Interest Subsidy Policy for Equipment Upgrade Loans (Caijin [2026] No. 2, January 2026). This article does not constitute financial or investment advice.