Research SMEs Private Debt

In China, small and middle size enterprises are owned by private employers. In terms of scale of operation, risk resistance capacity and financing ability, these companies have no advantages in market compared with large companies, they are called’vulnerable group’. The topic of solving financing problem for small and middle size companies has been discussed for long time. In May2012, the Shanghai Stock Exchange and Shenzhen Stock Exchange finally issued the pilot regulations concerning small and middle enterprises (SMEs) private placement bonds respectively. The new program helps to add direct financing channel, and are welcomed by capital market. Candidate who is one of the workers that directly participating in issuing SMEs private placement bonds, understanding the principle and knowing regulations well throughout the work. However, candidate find out that the application of this new program in small to medium size enterprises is not as much as expected, many employers have lack knowledge about how issuing bond can bring benefit to them; and also, there are few studied on SMEs private placement bonds in public including how to enhance regulation and system.The purpose of this paper is to study the new private bond from aspect of understanding the background, analyzing problems that emerged during the process, and how to solve these problems.The paper will begin with analyzing current situations of financing method that small to medium size enterprise can use in the market, and exploring how the program launched. Then, analyzing the concept in terms of policy and practice, to find out and solve the problems. In conclusion, suggestions that help to enhance the whole financing system will be presented.