An Study Of The Effects Of SME Debt Financing Structure On Growth Of Enterprises

In the process of building a modern enterprise system, the capital structure is a key factor in corporate governance. Debt financing, as an important aspect of the capital structure, is a vital external financing way. It is related to the costs and profits of corporate financing, as well as gives feedback to external investors by signal transfer, which impacts companies’ performance and growth. With the further development of China’s capital market, financing ways of China’s listed companies also increase. The financing way of China’s listed companies has shifted from equity financing orientation to debt financing orientation. However, with the complexity of the debt financing structure, it affects the growth of SMEs. And so, SMEs should choose an appropriate debt financing structure to promote the development and growth of themselves better.Based on financial data from 2010 to 2012, the paper studies the relationship between the debt financing structure and SMEs’ growth, with the impact of the debt financing structure on SMEs’ growth as the study object and the SME board listed companies as samples. First, this paper introduces theories related to the debt financing structure and the corporate growth, summarizes previous research results, divides the debt financing structure into three levels, namely the debt level structure, debt maturity structure, and debt type structure, and reflects the corporate growth by selecting 17 financial indicators. Second, the paper analyzes the financing structure theories of China’s listed companies, regards the relationship between the debt financing structure and corporate growth of listed companies as the research focus, and combines report data of listed companies, to obtain a comprehensive evaluation of the corporate growth by using the factor analysis method. What’s more, the paper empirically analyzes the relationship between the debt financing structure and corporate growth with the use of qualitative and quantitative analysis and descriptive statistical analysis methods, as well as the use of the SPSS software for linear regression. The research results show that the debt ratio of the SMEs has a significant negative correlation with the corporate growth, which differs from the author’s expectation and many western studies. What is more, short-term debts of the SMEs have a significant positive correlation with the corporate growth, while long-term debts have a significant negative correlation with the corporate growth. Finally, the business credit rate and borrowing rate have a great negative impact on corporate growth. Therefore, the positive effect of debt financing does not function effectively in the SMEs.