Logistics Finance, An Innovative Approach For The Financing Puzzledom Of SMEs

Nowadays, SMEs are playing decisive roles in national economy and supply chain activities. However, financing puzzledom has been a key factor to the development of SMEs, which also puzzled local authority, financial departments, as well as intermediary agencies. Thus, the solution of SME financing puzzledom should be the major issues for China's financial researchers.This paper conducts from an investigation on the financing situation of SMEs, in light of the relevant financial theories, analysis of the restriction of the internal and external for SME financing, and concludes that, SMEs' inherent flaws should be the root causes, and financial environment intensify the financing puzzledom of SMEs, These factors lead to a difficult interaction between banks and enterprises.Financing puzzledom not only troubled SMEs, equally troubled financial researchers. At home and abroad, the theory circle has put forward various measures, and the government and the society have adopted a variety of measures, such as the setting up of small and medium-sized private banks; Construction of SME credit guarantee institutions to provide financing to SMEs Credit Guarantee; establishment of the SME board for SMEs' financing from capital markets; introduction of the high-risk investments. While all the above measures could solve the problem in some kind of degree, they also have some flaws.The author comments on each of these measures and concludes that, compared with other financing approaches in current economic conditions; logistics finance is precisely a more effective mechanism for resolving the financing puzzledom of SMEs, especially on seasonal sales or production to meet the strong demand for short-term financing. Believe that in such a financing mechanism, the problem of financing for SMEs will be a great degree of ease and improvement. Fundamentally speaking, the logistics finance is an innovative financial product for commercial bank loans. It is not only adapting to the characteristics of the production and operation of SMEs, but also conforms to the requirements of economic development innovation. Exploration to logistics finance is firstly in the practice then in the theory. Logistics finance business have many and varied forms, but summed them up only three basic models: an intermediary model, a security model, and a self-support model. This paper briefly describes the processes and characteristics of the three models, and selected two widely-used operation programs to introduce. Financial institutions can combine their conditions for the logistics finance services innovation.Any new developments will not be smooth sailing; there is also a wide range of business risk for logistics finance. Effective analysis and control of these risks is the key to the success of logistics finance. Although, in China the development of logistics financial business is still at an early stage and the business scope is also fairly limited. However, it will not affect the pace of domestic financial reforms. I believe that with the accumulation of logistics financial practices and theoretical researches, Logistics finance will have a vast market and good prospects.