Abstract: As a common practice in China， lending between enterprises has been identified as invalid by the judicial organizations. However， from the perspective of legal analysis and present legislation in China， denying the validity of business lending lacks legitimate foundations. Based on Chinas current economic situation， the advantages and disadvantages of legalizing lending between enterprises are analyzed. The findings indicate that in such an economic transition period， China should draw on the basic concepts including freedom of contract， financial security and good faith， and clarify the basic contract execution conditions and interest return standards of lending between enterprises. Meanwhile， it can yet be regarded as a realistic path to strengthen the enterprises internal risk control and the national external supervision system， to construct a legal protection mechanism of lending between enterprises， and to direct the orderly execution of lending between enterprises.

Key words: lending between enterprises, private lending, validity of contract, legal protection