Research On The SME Direct Financing Problems

With the deepening development of knowledge economy, small and medium-sized technology-based enterprises have made remarkable achievements in sicentific and technological innovation and gradually become a significant power to stimulate national economic growth. Although they are enjoying an increasing higher status in the economic operation and have become the main force of scientific and technological development and innovation of China, small and medium-sized technology-based enterprises have long suffered from the problem of fund shortage which is the most critical factor to restrict their development. Commercial banks’ preference for low risks makes it difficult for small and medium-sized technology-based enterprises to get the loan. While at the same time, internal financing cannot meet the needs of such enterprises on the stage of high-speed growth any more to pursue scale development. The curent trend shows that interanl financing and indirect financing which is represented by applying for loans from banks or other financial institutions can no longer be the best choice of small and medium-sized technology-based enterprises which as a result must enlarge the proportion of direct financing if they wish to break the bottleneck.This thesis with financing structural theory and financial growth cycle as its theoretical foundation conducted a research on the issue of direct financing of China’s small and medium-sized technology-based enterprises on the basis of vast survays, field visits and reading of a large number of documents from home and abroad. Proceeding from the status quo and existing problems of the direct financing of such enterprises, the paper excavates the main causes of their difficulty of conducting direct financing and then analyzes the successful financing modes of some developed countries which lead to beneficial enlightenments of how to develop direct financing for small and medium-sized technology-based enterprises of our country. Finally it puts forward the countermeasures to boost the direct financing of China’s small and medium-sized technology-based enterprises in order to help them get out of trouble and achieve sound development.