Study Of Bank Financing For Smes In China-related Legal Issues

Small and Medium Enterprises (SME) is an important part in national economy in China. It not only holds a dominant position in the number of enterprises, but also plays the very roles in providing employment opportunities, expanding market of domestic demand, developing technological innovation, stimulating economic growth, and so on, which large enterprises can not substitute. But in the developing process, it is always difficult to break through many bottlenecks, the most prominent one can be called financing difficulties. This paper chooses a research on this problem, and tries to provide some recommendations in solving financing difficulties.The paper first defines the concept of Small and Medium Enterprises (SME), analyzes the definition standards of SME for determining special support for the scales of SME, and also comments on the division standards in China, as well as in other countries abroad. Then it expounds the overall developing situation of SME in national economy in China, including the status and effect of SME and the problems encountered in the developing process. And finally it elaborates various ways financing in foreign countries, and educes four main forms of financing in Chinese SMS, which including direct financing, self-financing, government grant and indirect financing mainly aims at commercial banks.For SME is in situations of small scale, lack of fund, poor ability of risk-resisting, serious shortage of accumulation, low-rise in overall quality, and also it need to pay certain transaction costs, which result to direct financing and self-financing become unbearable channels in the financing forms of SME; Moreover, for the limitation of government grant, a large number of SME can not meet their financing needs. Therefore, indirect financing aims at commercial banks have become the most possible way for SME to engage in economic activities and get access to funds for developing. But whatever can we analyze from the developing actualities by the own condition of SME, or from the external environment condition of enterprises commercial bank financing as well as the imperfect current legal system of our country, the commercial bank indirect financing as a major viable channel for SME financing are is have many difficulties in reality.In view of many difficulties exist in SME bank financing that mentioned above; the paper has focused on providing some solution recommendations for improving SME bank financing. Specifically, from the own aspects of SME, in addition to strengthen their own qualities, the key point is to create a SME credit guarantee legal system. From the external environment, the government should enlarge its policy support to SME, establish independent SME financial institutions, etc. Finally it analyzes of establishing and improving the legal system of SME bank financing.The solution of SME bank financing is not only relevant to the development of SME, but also shows a great significance to our national economic sustainable development and the establishment of a harmonious society. The paper wants to provide some recommendations to the solution of this problem by analysis of SME financing problem.