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

Small-and-medium-sized enterprises (SMES) are playing an important role in national economy and social living. It takes on the effect that cannot be substitute big enterprises for in increase urban employment and urbanizations especially. However, the difficulty of SMES for financing becomes a graveness problem that puzzle the economic development, the market perfect, and the society progress. The problem have arose keep close watch on of economists, industrialists and government. The researchful object of this paper aim at the financing of "non-state-owned" SMES for discusses well and truly the essential of the problem. This is owing to that the problem of SMES financing has been being the representative development significance of the progress of market economy, and there is largish ownership difference that cannot but bring graveness effect in capital structure and financing mode between the SMES in China and in the Occident.Firstly, from the points of reverse choice and ethics risks, this paper explained the reasons of financing difficulties for middle-and-small-sized enterprises. It went on to explain the preference of financing models using the company financing theory and the theory of finance. This paper believes that for middle-and-small-sizedenterprises, loan difficulties should different from financing difficulties. In China,there are few channels for middle-and-small-sized enterprises to receive finance, thepercentage of internal financing are too high, while that of external financing is pretty low. Bank loan is the most important external fmancing channel for middle-and-small-sized enterprises, however, funds provided by banks are mainly liquid funds and fixed asset replacement funds,very few of them are long-term loans, therefore, middle-and-small-sized enterprises lack of long-term stable funds, moreover, the size of capital determine whether the enterprises could receive bank loans and long-term liability funds. This is the financing reality for Chinese middle-and-small-sized enterprises as well as the core issue of this paper. Apart from clarifying the related concepts, expounding the current financing situation formiddle-and-small-sized enterprises, this paper also analysed the internal and external causes of their fmancing difficulties.At the same time, this paper compared and studied the financing models in developed countries. In developed countries, there are two major financing models for enterprises, one is securities financing represented by the UK and the USA; the other one is bank loan finance represented by Germany and South-east Asia such like Japan and Korea. Using those financing models in developed countries as reference, considering the realities in China, it was determined that there are two stages for Chinese enterprise financing.Currently, it is important to establish various multi-layer financing systems for middle-and-small-sized enterprises. In terms of liability financing, system innovation should apply to commercial banks, the development of financing institutes should be facing towards middle-and-small-sized enterprises, financing models such like financing assurance and lease for middle-and-small-sized enterprises should be expanded, fmancing innovation for middle-and-small-sized enterprises should be promoted. Within financing systems of middle-and-small-sized enterprises, the development of small enterprise board should be able to push the development of risk capital markets and related multi-layer markets. Meanwhile, as information is not transparent within most of the middle-and-small-sized enterprises in China, on the basis of promoting enterprise system innovation, the development of various securities interest private placement and off-board capital market should be paid attention to, thus opening direct financing channel in capital market.