A Study On The Financing Of Private Small And Medium Sized Enterprises

A huge number of private small and medium sized enterprises is an important part of the national economy in China, which plays an irreplaceable role in creating jobs, GDP, tax revenue and so on. Its sustainable, healthy and rapid development is important for building a well-off social.How to develop small and medium sized enterprises is a hot issue all the time, and also be taken into policy considerations at all levels of government. With flourishing development, private small and medium sized enterprises are also faced with numerous development bottlenecks. Especially after RMB appreciation, foreign demand dropping, labor costs rising, and raw material prices soaring, the developments of private small and medium sized enterprises are facing an unprecedented crisis. Financing as a constraint factor among them in the development of private small and medium sized becomes a hot topic of all of the people. Financing problem has always been a subject of academic study, but the problem has not been solved. This paper explores this problem and gives forward practical proposals from the three aspects of enterprises, financial institutions, and government policies.This paper gives an in-depth analysis into the reasons and puts forward the suggestions from three aspects basing on financing plight. This paper will put forward integrated and all-round proposals to improve the status of private small and medium sized enterprises financing environment to offer recommendations for decision-making of the relevant departments. On this basis, the paper studies from the following aspects:(1) Basing on a number of scholars'definitions of small and medium sized enterprises and private enterprises, this paper gives a definition of private small and medium sized enterprises, and introduces its characters, related concepts and financing theories.(2) This paper gives the specific descriptions of the financing difficulties and analyzes the reasons of private small and medium sized enterprises. Nowadays, small and medium sized private enterprises'financing has a high cost, narrow channels, many difficulties and high threshold. Because of their own poor management, poor credit, weak ability to resist risks of private small and medium sized enterprises, and profit-oriented values, mechanism building, institutional arrangements, institutional construction of financial institutions, small and medium sized enterprises'financing is difficult. Poor external security mechanisms and lacking government policy support make financing of private small and medium sized enterprises even more difficult.(3) Finally, this paper proposes several suggestions to improve financing situation of private small and medium sized enterprises in China from the three aspects of the enterprises themselves, financial institutions, and government policies. Enterprises need to improve the its own quality, and strengthen the credit-building, strengthen management and governance capacity-building, and expanse foreign financing, and establish small and medium sized clusters to provide mutual assistances and funds. Financial institutions need to improve their services and its credit policies, and expanse its services and financial products for private small and medium enterprises. Innovate credit risk controlling mechanisms, and develop non-governmental financing.Government should also increase the risk investment and make more government's support policies and improve the security mechanisms for the financing of private small and medium sized enterprises to create a favorable external environment for financing. The innovation of this paper is multi-perspective and systematic considerations to widen financing thoughts.