Sme Financing Countermeasures

For their small size, large numbers and agile method of management,the medium-size and small enterprises (MSSEs) are fit for the complexmarket, and drive the national economy increase steadily, absorb labourforce, flourish market, and promise competition. All of these determineMSSEs play an important role in the development of national economy. There are many problems that restrict the development of MSSEs, suchas low level of technology, poor management and unqualified employees.Raising capital, the thesis of this article, is most difficult in all problems.The growth of enterprises needs money to be enough, but a lot of MSSEshave difficulties in raising capital. When Commercial banks provideloans to enterprises, they prefer large corporations to MSSEs, whichlimits MSSEs' development. It is a critical problem that MSSEs meetinadequate financing which affects the steadily increasing of nationaleconomy. Based on the importance of this problem, MSSEs' inadequatefinancing is chosen as my thesis. This article consists of three chapters, following the logic sequence ofputting forward problems, analyzing problems and solving problems.Chapter 1 is the introduction to the thesis. I will discuss the MSSEs'definition, illustrate the development of MSSEs at present and confirmMSSEs' important role in national economy. In Chapter 2, I will analyzethe status and reasons of MSSEs' difficulties in raising capital. In the lastchapter, I will put forward a solution: Financing Lease, which is the bettermethod for MSSEs. You will see the contents of this thesis in thefollowing. Chapter 1is an introduction. There are 3 parts in this chapter. First, Idefine MSSEs by quality and quantity method and give a definition toMSSEs in our country. Second, I describe the development of MSSEs atpresent. Third, I confirm the importance of MSSEs in China, such ascreating employment, promoting the growth of economy. Chapter 2 includes 3 parts. I analyze the status and reasons ofinadequate financing in detail. The first part illustrates the status and characteristic of MSSEs' raisingcapital: the level of debt is comparatively high, financing cost is high too;financial institutions is the main channel for MSSEs' raising capital;mortagage loan and assure loan have been the mostly method for MSSEs'getting loans from bank. The second part analyzes the problems in MSSEs' financing from twoangles of direct finance and indirect finance. Problem s in direct finance:for MSSEs, coming into stock market difficultly; entering bond market isalso restricted. Problems in indirect finance: difficult to getting loans from banks;difficult for banks providing loans to MSSEs, mostly because thosedistempered financial systems of MSSEs, statements are inauthenticprevalently. The third part analyzes the reasons of inadequate financing from twoaspects of inside and outside MSSEs. Inside reasons: in defect of enoughmortagage assets; ruling configuration is not normative; lower credit level;higher managing risk; outstandingly anisomerous information; coarsemanagement boosts up the conflicts of financing. Outside reasons: beshort of integrate policy system of supporting MSSEs; lack ofmedium-size and small banks that serving MSSEs technically; absent ofnecessary assure institutions; be devoid of support from state commercialbanks; limitations of market system. In chapter 3, I put forward Financing Lease, which is a financingmethod fit for MSSEs, can solve the financing problem effectively, andwhich is most important part in the thesis. The first part discusses that Financing Lease is a particular financingmethod. Firstly discussing its definition and primary forms. Secondlydiscussing the developing status of Financing Lease inside and outsideChina, it is a secondary financing means overseas, but in China, leasingmarket is just in elementary phase, the structure and forms of FinancingLease are comparatively single. Thirdly I discussed the economicfunctions of Financing Lease. The second part analyzes the reasons of MSSEs preferring toFinancing Lease...