Xiantong Asphalt & Concrete Co in the Pingtan Comprehensive Pilot Zone (PCPZ) recently succeeded in obtaining a foreign loan worth 15 million yuan ($2.4 million) from a bank in Seoul, South Korea, the first enterprise in Pingtan to do so.

The application of a loan for Xiantong, which settled in Pingtan in 2010 amid growing business opportunities from a comprehensive infrastructure construction, didn't go as easy as most people assumed, according to Lu Xianjin, the company's finance director, who revealed that it failed its previous two loan attempts.

"We planned to apply for a loan from a local bank in 2012. But it didn't go well because the banks in Pingtan didn't have too much money. Most of them had been lent to real estate enterprises at higher interest rates," he said. "So we didn't get a penny for the first try."

"Then in 2013, our company decided to capitalize on uphill market trends by borrowing money from the banks again. But somehow we let the chance slip away, not to mention that we had to go through an exhausting process for the approval of a loan from the bank's provincial authorities, which would have taken too much time."

The stalemate was broken as a new pilot policy concerning foreign debt was put forward in Pingtan in late 2014.

The State Administration of Foreign Exchange authorized Pingtan a number of forex policies, including one stipulating that local enterprises can carry out self-disciplinary ratio management (which sets limits on the ratio between assets and liability to avoid financial risks) of their foreign loans including RMB.

The policy means Chinese companies in Pingtan were allowed to contract foreign borrowings for the first time, with the amount below half of the company's net assets last year.

It didn't take Xiantong too long to find a bank in Seoul capable of issuing the loans with help of the Pingtan branch of the Bank of China (BOC).

"The situation changed, as BOc in Pingtan found a target bank in Seoul, and then approved the foreign loan. The whole process was simplified as it didn't have to go through BOA's provincial branch," said Lu.

It is notable that the rate of foreign loans is lower than domestic loans.

"A loan at Pingtan's banks could see a rate of up to 30 percent higher than the benchmark interest rate, while a foreign loan can see a rate 30 percent below the base rate or even lower, which reduces the financing cost for enterprises," said Lu.

The repayment period of the foreign loan is set at one year for now, but it is expected to be extended as part of preferential policies for the Pingtan Free Trade Zone, sources said.

Lu said the company is looking forward to the idea. "We are on a one-year deadline, meaning we have to pay it off then and borrow again. I hope the time limit can be longer and the money limit larger."