An Analysis Of The Impact Of Private Equity Financing On Small And Medium - Sized Enterprises’ Financial Performa Nce

With the continuous development of China’s capital market, more and more domestic and foreign private equity funds started to invest in China. Small and medium-sized enterprises as a major force in China’s economic development.Due to restrictions by their own conditions, small and medium-sized enterprises have a difficult to obtain funding for their own development by way of debt financing. Therefore, they gradually began to favor the financing of private equity financing.The object of this paper is study the consequence of financial performance of private equity financing in small and medium-sized. enterprises, by a case study of XQL of Guangzhou. Private equity financing for small and medium-sized enterprises not only to raise the necessary funds for development, but also may bring management and technical advantages as finance companies to promote their development and growth. In 2007, XQL introduced private equity financing from Legend Capital Group, and use the funds to bring economies of scale for their own development, expanding the company’s main production scale and sales volume, improved their profitability. Moreover, Legend Capital played an integral role in the introduction of talent and technology to enhance the XQL company’s development capacity. Furthermore, the introduction of private equity financing would to improve the XQL company’s capital structure and reduces its financial risk. Finally,at the help of Legend Capital, XQL completed in small plates listed on the stock market in the association and its raised larger funds.The text is divided into four parts. The first part of the paper described the research background and significance of research, research methods. The second part of the paper describes the basic concepts of this paper, and describes the Private equity financing, small and medium-sized enterprises and financial performance theory, and explains the relationship between Private equity financing and Corporate Financial Performance laid the foundation for future research. The third part of the paper made a case analysis, Legend Capital invest XQL private equity investment company, for example, changes in the interpretation of the company’s financial performance XQL after injection of private equity financing, and analyzed the causes of private equity financing XQL impact on the company’s financial performance. The forth part of the paper combining the analysis of case, and give some suggestions of private equity financing to small and medium-sized enterprises.