Study Of SMEs Financing Difficulty

SMEs play an increasingly important role in China's current economic operation. The conflict between the rapid development of SMEs and the financing channels and the mode of financing has highlighted. How to solve the problem of financing SMEs is important for China's national economic development.The status quo with China's SME financing, we analysis from the government, the financial system and the SMEs in this paper. First, we make a full explanation for the status quo of SME financing, the existing problems and the causes. At present the financing of SMEs and the financing channels for SMEs are unable to meet the needs of their own development, corporate external financing based mainly on indirect financing, more than half of the corporate finance needs are not met. The problem is mainly manifested in both the direct financing and the indirect financing are all difficulty. The problem is mainly manifested in: the existing financial system is not suitable for the development of SMEs, the financial enterprises"hate poverty like well", like"wholesale", and do not like the"retail", the financing of SMEs in a disadvantageous position. Second, the reasons for the security agencies, the source of funding less risk of loss compensation mechanism, the security agencies and banks operating in a certain contradiction. Third, it is their own reasons for SMEs, the majority of SMEs operate in poor condition, poor credit, loan risks are great, most SMEs lack of clear development goals, so the bank which in support of SME hesitates to do it. Fourth, the reasons for the capital market, capital market development lags behind, weakening the financing capacity of the SMEs, the SME financing directly related to market access conditions too strict control, lack of flexibility so that it can not be listed in the securities financing and issuing bonds financing, constrained the expansion of SMEs financing capacity.Second, the analysis enlightenment to us that some foreign countries and regions in the financing situation of SMEs and practices. 1.From some countries and regions in the financing situation of SMEs, the SME financing difficulties have many common causes, but from a comparative point of view, or between the U.S. and Europe have a certain distinction: Americans advocating an independent liberal spirit, coupled with the relatively strict financial management, so the financing difficulties of SMEs in the performance of major financial institutions on the preferences. The Europeans stressed that the spirit of cooperation, the EMS has larger external financing tend, financing difficulties mainly in their own reasons(such as high-risk ,poor management, etc.). 2. From some countries and regions of the SME Credit Guarantee conditions, the establishment of SME credit guarantee system for countries and regions in the world to support SME development practices. As the same time the SME credit guarantee system has rapid development, the international organizations which promote the interaction between the countries and regions also began to appear. The basic operational procedures directly into the operation of the market and open–line operation, the common practice including the guarantee funds budget; secured magnification; cooperative banks and guarantee agencies responsible proportion of the secured loan period; security charges; secured loan limit; collaboration banks; security risk control.3. From the solution of some countries and regions to support SME financing, they mainly include tax breaks, financial subsidies, loan assistance, venture capital and capital markets direct financing. By some countries and regions over the financing of SME, with the current situation of the SME development in China, can bring to us the following insight: the corporate system should be able to direct financing, establish the of a "GEM" as soon as possible and encourage SME to fund by friends and family and establish and improve policy support system.Finally, this article provided the solution of the current SMEs's difficulties of financing. First, the Government and banks should vigorously support and development of city commercial banks and rural credit cooperatives, giving full play to the role of grass-roots bank. The banks should try their effort to make the financial innovation, improve the SMEs loan guarantee system, and accelerate the building of modern enterprise system, vigorously improve social credit order. Second, the enterprises should strengthen the information and communication of bank and close-level relations, strengthen financial management, eliminate false phenomenon and increase the technological content, the development of the future product, participate in mutual guarantee fund, the search for effective security, strengthen credit awareness, and establish good reputation. These measures are effective solutions to China's current financing difficulties of SMEs's in an effective way.The importance of The SMEs in the development of the national economy is in no doubt. Although the problem is long-standing, as long as we take positive and effective coping strategies, they will be able to alleviate the difficult problem of financing SMEs's to promote the healthy development of SMEs.