Credit Financing For And Medium-sized And Small Enterprises

Supply chain finance is a new financing model tailored specifically for small and medium-sized enterprises (SMEs). It effectively integrates capital flow with supply chain management and provides new finance service for the weak enterprises in supply chain. And therefore it is very necessary to study systematically on the operation of supply chain finance, which reveals its advantages and improves the effectiveness of the plight of SMEs'financing.In this paper, we first define the object of supply chain finance and discuss the new finance model which the SMEs use the suppliers'receivable accounts and the overall credit line of supply chain to finance. For one thing, supply chain finance improves the space of bank profit because it reduces the risk of bank and has loan scale. For another, it smoothes the capital flow, enhances the overall competitiveness, promots the formation of economy scale and reinforces the supply chain. All of this reduces the financing risk. With the cooperation of financial capital and industrial economy, supply chain finance builds the industrial ecology which the supply chain of banks, enterprises and goods can exist mutually and beneficially and have sustainable development, benign interaction.After establishing the long-term, stable and effective system of incentiveness and game model, we discuss the conditions for cooperation balance to efficiently maintain in long-term. The stability of supply chain is an ensuring mechanism for successful implementation of supply chain finance. A stable supply chain organization can play more efficiently than banks in the credit evaluation and supervision over the borrowers. Supply chain finance avoids the formation of SME financing difficulties, such as, asymmetric information, operating risks, lack of collateral. However, it opens a new path.