Study On Credit Evaluation Of SMEs-Based On Enterprise Life Cycle

For a long time, financing difficulty of small and medium-sized enterprises is a big problem around the world, and the primary cause of the problem is small and medium-sized enterprises'credit. At present, the credit loan departments of our commercial banks evaluate the credit of enterprises using the same standards according to the "safety, liquidity, benefit" principle, but haven't set up special credit evaluation standards for small and medium-sized enterprises. Because the evaluation factors are not applicable for all of the enterprises, the credit of small and medium-sized enterprises is underestimated in some degree, and their financing situation is deteriorating. This shows that it is urgent to design a set of credit evaluation standards which are suitable for small and medium-sized enterprises. So this paper is devoting to exploring how to understand the true credit level of small and medium-sized enterprises, and what the factors which really impact the realization of their credit are.Taking the credit evaluation theory as a foundation, this paper has summarized three major factors which influence the credit level of small and medium enterprises: performance desire, performance ability and external environment. Among them, the performance desire is the primary factor, and the second is the performance ability. This is the first level of this paper:the overall framework of factors which affect small and medium-sized enterprises'credit evaluation. Under this background, according to the theory on enterprises'life cycle, the growth of small and medium-sized enterprises is divided into initial, growth, maturity and recession, and at the same time, this paper has designed credit evaluation factors from above-mentioned three aspects—performance desire, performance ability, and external environment according to the characteristics of enterprises during each period. This is the second level of the full text, and it's the further deepening of the first level:which are the specific factors affected small and medium-sized enterprises'credit evaluation. Finally, based on the selected credit evaluation factors, and combined with the characteristics of each stage in enterprise life cycle, this paper has determined the weight coefficient through the analytic hierarchy process (AHP) and set up an index system of credit evaluation applied to small and medium-sized enterprises' initial, growing and mature stage.Through the small and medium-sized enterprises'forming process of credit evaluation index system, and we can conclude that developing their own credit is the only efffective way to solve financing difficulty. At the same time, we should construct credit evaluation index system applied to each stage according to the characteristics of different periods in enterprise life cycle, and hence we can make the right credit evaluation for small and medium-sized enterprises which belong to different stages in the growth process.