Trust Fund For Debt Collection Used For Financing Of SMEs

The academia has already made a lot of researches on the problems related to financing of SMEs. In recent years, financing has achieved a transfer breakthrough from physical assets of collateral to such intangible assets as trademarks, intellectual property, and equity pledge. But the breakthrough did not address the issue of financing for SMEs as desired. According to the statistics, as the SMEs lack of innate fund and the direct finance threshold is beyond the reach of them, 98% of the fund relies on the bank loans. However, the reality shows that, the loans for SMEs from major financial institutions is only 16%, and only 30% of high-quality SMEs’ credit needs are met. Therefore, relying solely on existing means of financing issues, funding needs of SMEs can not be effectively addressed. On the other hand, despite the limitations of funds, the SMEs’role in the national economy is becoming more important. The materials from China’s information network for SMEs show that, by the end of September,2009, the number of the SMEs (including individual industrial and commercial households) has been up to 42 million accounting for 99% of the total number of enterprises. The SMEs is vital to the whole world creating about 60% of GDP, providing 80% of the citizens’employment post, paying 50% of the total national tax revenue. Therefore, the SMEs’financing difficulty not only relates to its development itself but also relates to the national economy movement and the social long-term steady progression.Given the above analysis, the improvement of existing products and the further financing innovation of SMEs will be more meaningful to enable more SMEs to go over the financing difficulties.In our country, Zhejiang Province’s SMEs hold more than 99.8% proportions of the total number of enterprises, simultaneously, compared with other provinces, Zhejiang Province does the best in the solution of financing question. In the financing way innovation aspect, on the traditional guarantee pattern financing way’s foundation, Zhejiang province creates the bridge subterranean pattern (to introduce field investor into the traditional pattern) and the LU QU pattern (to take the government finances as guidance, take set creditor’s rights trust fund as financing platform), and the two patterns attribute a lot to the fund financing.Figuratively speaking, LU QU pattern refers to a connection among a variety of financial resources (security, trust, investment), all market players (security companies, trust companies, banks, securities industry, SMEs, investors) and the government, so that all social forces can be united to make ways more easier to solve the problem of the SMEs’financing.The structure of the article is as follows:The first part is introduction, which describes the background and significance of topics, subjects, methods and articles of ideas. The second part introduces the financing situation of SMEs in China firstly, showing that the lack of innate fund; the high direct finance threshold standard, and the private capital not legally recognized, all of which lead to the difficult situation of SMEs’financing. Then it elaborates on the financing situation of SMEs in Zhejiang Province as well as a range of innovative financing products. The third part introduces all the guarantee pattern products, from initial traditional tripartite guarantee to four side participation bridge tunnel pattern in the Zhejiang Province. The fourth part, also the article core, starts with several theory basis including resources conformity, risk and income match, and option establishment. Then it performs the process. The fifth part, also the feature article section, displays several successfully released products.The sixth part, which is also the article ending, introduces the positive effects from all the participant aspect firstly, in the following some advice are given to several disadvantages such as, high coordination cost razed by the several participant with different aims, lack of fund used for guidance from the government and how to handle the fund risk control question. In the end, some suggestions on the promotion of LU QU pattern implemented in a broader scope are given.