Legal Issues Of SME Financing

With continued economic growth, the status of small and medium enterprises has occupied a more important place. However, because of lacking successful reform, the status of them remains at low level for a long time. Personal property can not be protected effectively. Especially, the phenomenon called guojin mintui, meaning the state sector advances and the private retreats. The issues of financing squeeze faced by many small and medium enterprises have become increasingly prominent. The main ways of financing infrastructure are hard for small and medium enterprises, including bank loans and private financing service. From a legal perspective, Because of emphasis of government intervention and ignorance of interests of the individual economy, they lead to monopoly of state investment bank in reality, the high standard for private enterprise entering bank industry and financing unsatisfactory for large number of small businesses. Private-sector financing prevails over many places. However, because of legislative gap in folk finance and enforcement in the area of justice, they lead the disorder of folk financing market. The unceasing expansion of state investment may squeeze out survival space of small enterprises. Fundamentally, promoting SME financing to alleviate the problem.we should change our mind, break market monopolization, speed up to establish and improve law system of SME financing, further to create a fair financing environment and encourage innovative way of SME financing. Specially, starting with following framework, we promote legislative level of SME financing. Establishing the perfect related legal law so that takes private-sector lending into financing management.our state formulate and implement laws, such as the regulation of Collection of credit and management of enterprise, Guarantee law of SME; our state improve the relevant law of SME direct financing and lower the standard of issuing stocks and bonds by SME.