Small And Medium-sized Manufacturing Enterprises Financing Difficulties And Countermeasures

In recent years, under the combined effect of the policy support and market mechanism, the speed and quality of the development of SMEs in China are stepping into a new level, playing an important role in promoting economic development, increasing employment opportunities, deepening reform and opening, improving people’s lives and building a moderately prosperous society. Among them, small and medium-sized manufacturing enterprises as the main force are the foundation of the national economy, the most active factor in the socio-economic, undertaking the important mission of maintaining social economic sustainable and healthy development and technological innovation. However, due to the complexity of the process of small and medium-sized manufacturing business, its capital requirements shows the diverse and complex. Either the liquidity funds for the purchase of raw materials, semi-finished products and the payment of wages, or long-term funds for purchasing equipment and other fixed assets, and even a variety of product marketing costs and the seller’s credit all need the outside to provide financial services. The demand for funds is large, while the cash flow is relatively slow. At the same time, due to information asymmetry and the resulting moral hazard and adverse selection, resulting in the bank on behalf of financial institutions for small and medium processing manufacturing enterprises "credit crunch", the small and medium-sized manufacturing enterprises are facing severe financing difficulties. Discussing on the financing problems of small and medium-sized manufacturing enterprises, and seeking solutions and measures to ease its financial pressure, to promote its high-quality development, are necessary for maintain macroeconomic healthy operation and social stability. Through the study of domestic and foreign literature, first of all, this paper reference to standards of different countries, defines the small and medium-sized manufacturing enterprises through qualitative and quantitative two aspects and try to give a definition of small and medium-sized manufacturing enterprises:One type of company complied with local-based quantitative indicators of the number of employees, total capital, total sales, market share, total assets, in line with the SME criteria for the classification of the corporate nature of funding sources, supplemented by qualitative indicators, which engaged in the manufacturing resources (materials, energy, equipment, tools, capital, technology, information and human resources, etc.) through the manufacturing process, translate into the availability and use of industrial or consumer goods.Secondly, analysising three theories related to the financing problems of small and medium-sized manufacturing enterprises:the asymmetric information theory, the theory of credit rationing and financing costs, reveals the deep-seated reasons for the problem of financing of small and medium-sized manufacturing enterprises; Then, starting from the difficult situation of the financing of small and medium-sized manufacturing enterprises, analysises the enterprise itself and the external’s common reasons which lead to the financing difficulties; Then, for financing a rare internal and external reasons, from the three aspects of the enterprise itself, government, financial environment to ease the financing difficulties of small and medium-sized manufacturing enterprises responses.Again, selecting a case of JM from the small and medium-sized manufacturing enterprises to in-depth study, analysising JM company profiles and financing structure of the status quo, summed up by a comprehensive analysis of its financing structure. We believe that JM company is firmly in control of corporate control over, but there are indirect financing over-reliance on bank borrowings and long-term existence of short by long use, the mismanagement of the accounts receivable and other issues; On the other hand, enterprise’s strong momentum of development, good credit and financing ability status can be seen from the company’s organizational structure, marketing situation over the years and the credit status. Coupled with local governments, banks, etc. to provide good financing environment, we can say that JM is not yet points to play its proper financing. Finally, for the specific circumstances of JM, this paper proposed six financing strategies for it.(1) Dig the internal financing(2) Indirect financing-innovative security over chattels(3) Indirect financing-to strengthen cooperation with small and medium banks(4) Seek venture capital(5) Develop finance leases(6) Discounting of bills, pawn and other quick means of financing...