Trade Credit And Small-middle Enterprises Financing

Today, small and medium-sized enterprises have become an important power to promotenational economic growth. At the same time, financing difficulties have been a significantbottleneck for the development of small and medium-sized enterprises, and commonproblems governments around the world face. In our country, because the financial system isnot sound, the capital market threshold is too high, financing difficult of small andmedium-sized enterprise is a typical problem. As difficult in the financial market financing,many small and medium-sized enterprises are turning to the transverse financing betweenenterprises. Because of financing comparative advantage form by combination of capital andgoods, combined with the characteristics of convenient and flexible, trade credit is generallypreferred by small and medium-sized enterprises in financing deals. The results show that inthe enterprise debt financing, the proportion of trade credit financing is as high as43%-63%,far higher than the proportion of bank borrowing (see table3.2), trade credit has become animportant driving factor for the small and medium-sized enterprises to solve the financingsource and realize sustainable development. Therefore, depth research in trade credit and itsadaptability with small and medium-sized enterprises, have important practical significance insolving the financing difficulties of small and medium-sized enterprises of our country.This article, after carefully combing the current literature about trade credit, selecting thegem listed companies on GEM as research samples, according to financing preference of thesmall and medium-sized enterprise, makes deep analysis to the present situation of tradecredit financing for the small and medium-sized enterprise in China. According to the sampleenterprise’s financial data, drawing lessons from Du Pont analysis system, and establishing amultiple linear regression model, this paper does empirical research on the function whichtrade credit financing for the small and medium-sized enterprise business performance. Onthe basis of current situation analysis and the empirical results, we find the problems existingin the trade credit in small and medium-sized enterprise financing, and put forwardcountermeasures of small and medium-sized enterprise trade credit financing. The concretecontent includes: the first part, introduction; expounding the research background and significance, combing literature, summarizing the existing theory and research ideas andmethods, on the basis of the introduction, summarizes the innovation place. The second part,theoretical analysis; According to the characteristics of the trade credit financing, this paperanalyzes the applicability of the trade credit financing for small and medium-sized enterprises.The third part, the situation analysis of trade credit; counting58sample enterprise’s financialdata, make descriptive analysis about the present situation of small and medium-sizedenterprise trade credit, to provide the realistic background for empirical research. The fourthpart, the trade credit empirical research on the role of business performance; With Du Pontanalysis system, using panel data of58listed company, focus on analysis of trade credit to therole of business performance. The fifth part, conclusion and recommendations; Based on theanalysis of the situation and the results of the empirical, this paper put forward somecountermeasures and suggestions.Main conclusion: trade credit financing with quick, low cost, without the advantages ofthe collateral, become the important source of financing of small and medium-sizedenterprises; The empirical results show that coefficient estimates of business performance forsmall and medium-sized enterprises which trade credit financing and bank loan contribute to,are significantly positive. But coefficient estimate of trade credit financing is significantlyhigher than the bank loan. Efforts to dredge and expand the trade credit financing channel,giving full play to the trade credit financing function, are very important to promote thesustained and healthy development of small and medium-sized enterprises. This article putsforward some related suggestions from the small business, the financial system andgovernment.