The Research Of SMEs Equity Financing Problem

There are many small and medium enterprises in China. SMEs play an important rolein China’s economic development, optimizing the economic structure, easing employmentpressure. It forms a new economic growth point gradually. In China, SMEs have thefinancing gaps of equity capital and debt，like other countries in the world. The financingsof equity and debt are facing the great difficulties. Financing is always the bottleneck in thegrowth and development of SMEs. It is difficult to promote the innovations of enterprises,especially the manufacture and development of new products. In some ways, practice hasproved that equity financing can meet the funding demands for the growing and innovativeof SMEs. It is a mode of financing, which has advantage and development for SMEs.In view of these factors, this paper mainly adopts a variety of methods to research andanalyze for the necessity, environment, current situation, bottlenecks, and correlation in thefactors of the capital structure and equity financing, simultaneously makes somesuggestions to improve the current situation of equity financing for SMEs, such asresearching methods of literature study，SWOT analysis, statistical analysis, empiricalanalysis and so on.There are six parts in this paper. PartⅠ is an introduction, it introduces thebackground and purpose of this paper, researching methods and content, innovation andlack. It reviews the foreign and domestic researches at the same time. PartⅡ makesdefinition and description about equity financing and related theoretical basis for SMEs.Part Ⅲanalyzes the necessity and priority of equity financing for SMEs. Then it adoptsthe analysis method named SWOT to research for the internal and external environmentin equity financing for SMEs. PartⅣ analyzes the current situation, bottlenecks andincentives of equity financing for SMEs. PartⅤ empirically analyzes the capital structureand equity financing factors, and adopts some methods, such as asset-liability ratio, size,growth, cost of financial risk, value of asset-backed, profitability, non-debt tax shield andso on. Part VI makes preliminary suggestions and countermeasures to improve the equityfinancing for SMEs, combining with current situation, existing problems and the resultsof empirical analysis.