Legal Analysis And Countermeasure Study On The Financing Of Small And Medium-sized Enterprises

Small and medium sized enterprise (SME) is an important force inChina’s economic take-off. It is an important integral part of socialistmarket economy. But due to various reasons, the difficulty of SMEfinancing has been a major cause of problems in its development. Thispaper chose the related research topics and focused on the relationshipbetween finance and law, and discussed a number of issues of SMEfinancing, such as private financing for SMEs, inter-enterprise debtfinancing, bank financing of SMEs, conducted on the legal aspects ofanalysis, presented some ways to reduce the risk of financing of SMEs.The main research works done by the paper is as follows:1. Aiming at private financing for SMEs, the introduction ofliquidated damages is proposed to reduce the risk of private financing,and the designation of funded financial liability from the side angle issuggested, which define the source of funds to minimize possible illegal fund-raising.2. For inter-enterprise debt financing, by combining public andprivate law, the establishment of corporate debt financing laws andregulations is proposed to standardize corporate finance. And thedevelopment of venture capital financing is suggested to service for smalland medium enterprises.3. As for bank financing for SMEs, SME credit is proposal to buildthe legal system, and it is suggested to improve the social creditinvestigation and evaluation system, and build a sound credit guaranteelaw to reduce the risk of financial institutions to finance non-publicenterprises.Renowned economist Li Yining said that the power of China’seconomic development is to mobilize private initiative. Most small andmedium enterprises are from the private sector, so they are the carriers ofcivil economic activity. This paper has tried to adopt legal effect oneconomy, to study the relationship between law and SME financing. Ibelieve that the improved legal system of SME financing can deepenfinancial reform and escort SME development. The legal system is greatsignificant to build a harmonious society and promote economicdevelopment.