The Comparative Study On SMEs’ Late-model Financing Methods

Small and Medium-sized Enterprises(SMEs) are known as the backbone of national economy. It is important for China, which is in the period for economic transition and the adjustment of industry structure, to give full play to the effect of SMEs for absorbing employment, adjusting the industry structure and promoting scientific and technological innovation. However, since the influence of own insufficient strength and other factors, financing difficulty has been the bottleneck problem restricting the development of SMEs. Compared with the tremendous contribution that SMEs made for the development of our national economy, SMEs don’t get the corresponding rewards in financing.Over the years, in order to solve SMEs financing difficulty, a lot of research have been made by domestic scholars, and they have attributed the main causes of SMEs financing difficulty to the weak capability of SMEs, the preference of bank loans and the imperfection of guarantee mechanism. After the analysis about the research data in Laian county, the conclusions of the previous scholars on the SMEs financing difficulty is supported by the author. Considering the current situation that SMEs are mainly through indirect financing channels to raise fund, the performance of financing difficulty is that the external financing support can’t meet the demand of SMEs. So the author put forward that existing difficulties in "collecting information, controlling cost and preventing risk" are the core reasons leading to SMEs financing difficulty currently.With traditional financing methods, the internal financing is insufficient, and indirect financing is also difficult for SEMs to acquire under the influence of own insufficient strength. Moreover, the imperfection of capital market leads to the higher threshold for SEMs to finance directly. Traditional financing methods cannot satisfy the financing need of SEMs, and cannot solve the difficulties in "collecting information, controlling cost and preventing risk". In this case, the study on late-model financing methods is particularly necessary.Main ways for late-model financing emerged in recent years are analyzed and compared by this thesis. Through detailed analysis, this thesis finds that each financing way has its own advantages in solving the financing difficulties for small and medium-sized enterprises, but each one is applied for a certain scope. By contrast, three new financing ways, i.e. the Internet financing, supply chain financing, and the option loans have a certain advantages in terms of solving the financing obstacles that limit small and medium-sized enterprises in our country now. The internet financing can reduce the information asymmetry between borrowers and lenders, and make lower the single loan cost with the advantage of big data and the capacity of cloud computing. The supply chain financing can help the financial banks to depend on the core enterprises and the logistics companies in the industry chain to grasp information related to SMEs comprehensively. So it can reduce the credit risks. The option loans make use of the "Bank and PE" pattern to break the restriction of prohibiting commercial banks from mixed management to offer commercial banks chances to share the premium income after SMEs listing and realize the credit risk matches to the income.Late-model financing methods have obvious comparative advantages over traditional financing methods in solving the problem of financing difficulty of SEMs. But now there are some factors that limit the development of late-model financing methods in China. In order to overcome these difficulties, government, financial institutions and SEMs should make concerted efforts, which will promote the continuous development of late-model financing methods for SMEs in China, and make the financing problems addressed effectively.