Study On Debt Financing Of Small And Medium-sized Enterprises In China

Nowadays, the role of medium and small enterprises in economic development has been widely recognized by various countries. Meanwhile, an existing common problem during this process, the difficulty of financing, has also been intensively studied by policymakers and theorists. Theoretically, we can use "dual gaps"—gap of rights-and -interests capital financing, gap of debt financing, to define the difficult financing process in medium and small enterprises.Currently, in informal interests-and-right capital market of developed countries, the development of risk investment system and "second park market" has, to great degree, alleviated the "gap of interests-and-right capital financing". With the progress made in techniques for collecting and analyzing information by banks and other intermediary financial institutions, along with the perfection and improvement of governmental credit and debt secured system, the problem of "information unsymmetry" and "moral risk", which has troubled the financing process in medium and small enterprises, has to some extent closed the "gap of debt capital financing".Comparing with other foreign countries, financing process in Chinese medium and small enterprises encounters more barriers. The reason is these enterprises face not only the gap of rights-and -interests capital financing, but other influential problems, such as discrimination of ownership system, destruction of social credit, and incompleteness of structural reform in companies, etc. Therefore it is a tough and synthetical work to solve the problem of financing difficulty in China. Under such circumstance, this paper focuses on the issue of financing in medium and small enterprises with special emphasis on the problem of debt financing. This paper is divided by four chapters. First chapter analyzes the current situation of debt financing in medium and small enterprises and the reasons behind it. Second chapter analyzes the debt financing in medium and small enterprises from a theoretical perspective. Chapter Three is about the specific cases in debt financingin medium and small enterprises. Chapter four analyzes the relationship between medium and small enterprises and banks in context of financing process. Considering the comprehensiveness of definition, other aspects of financing in medium and small enterprises and corresponding contents will be included in this paper.