Research On The Role Of Private Finance In The Small And Medium-sized Enterprises Financing

With the deepening of the economic system reform in our country, small andmedium-sized enterprises(SMEs) on behalf of the non-state-owned economy hasincreasingly become the main driver of China’s economic development, and more andmore important role in the whole national economy. SMEs play an important role bothin the national economic and social development, which has also been widelyrecognized by the community, has aroused the attention of the governments at alllevels. The international community’s experience expresses, SMEs ’ developmentfacing a widespread and invite factor is a financing problem. Because of theparticularity of China’s SMEs financing and the lack of credit itself, it is difficult tomeet the financing needs of SMEs for bank-based formal financial institutions. Whileprivate finance in our country has developed rapidly in recent years, its disposablecapital increasing。Besides, its financing activities characteristics similar to SMEs’,which private finance can reduce SMEs’credit constraints in financing. As a result,from the money supply and demand characteristics and credit all aspects to analyzethe financing activitives, private finance and SMEs have co-adaptability.So Isuggests using the advantages of private finance guide and support the developmentof SMEs, alleviate SMEs’ financing difficulties, at the same time, reach win-winsituation between SMEs and private finance.This article mainly from the two aspects are studied, the first level analyzes thecurrent status of SMEs’ financing difficulties, and then deeply analyzes the reason ofthis. At this level, I combines some domestic scholars and put forward that the mainreasons of financing difficulties of SMEs is lacking of credit themselves, as well asinformation asymmetry and higher financing costs and so on; The second levelanalyze private finance in the role of SMEs which on the basis of analyzing thecharacteristics of private finance, and puts forward the feasible proposal. At thislevel，firstly, defined the scope of private finance, secondly, explore the role of it inthe SMEs financing from both theoretical and feasibility point, finally draw theconclusion.In addition, the article also introduced some of the enterprise financingstructure theory, the scope of the definition of SMEs and the characteristics of SMEcapital requirements, etc., Besides, considering the current political affairs to seek the solution to resolve financing difficulties of SMEs, such as questions about the pilot ofprivate Banks and the market plays a decisive role in the allocation of resources.Hopethat through these studies, can provide some help to alleviate financing problems ofSMEs.