In China, state-owned banks give loans to financially healthier and better-governed private businesses. They rely on business health rather than just connections when deciding who gets loans. Companies with the state as a partial owner find it easier to get bank loans, showing connections matter too. For manufacturing firms, big companies, and those in regions with developed banking, financial health is crucial for loans. Service industry firms, bigger companies, and those in underdeveloped banking areas need connections to secure loans. This research shows how Chinese banks decide who to lend money to based on company health and relationships, shedding light on how private firms get bank funding in China.