The Research On The Risk And Prevention Measure Of Debt Financing

With the economic development in our country,private enterprises have been able to grow rapidly and their status in the national economy has been increasing day by day.At the same time,the financing modes of private enterprises are also constantly expanding,private-owned financing slowly into the era of diversification.Debt financing,one of the financing modes for private enterprises,not only meets the capital needs for the growth of enterprises,but also brings vitality to or destruction of the future of the enterprises.In financing behavior,To return the principal and interest according to the agreement after the capital is financed is called debt financing.Under the force of many factors,the debt financing mode is the most widely used.During actual operation,it is a double-edged sword: on the positive side,borrowing funds to ease capital pressure,strengthen itself and exert financial leverage to seek more profits;play debt tax shield effect,reduce financing costs and expand profit margins;reduce their own business cash flow,improve capital utilization,optimize the ownership structure.On the negative side,the liquidity of the enterprise becomes worse,increasing the pressure of debt repayment;affecting the day-to-day management and strategic planning of the enterprise;causing other consequences such as insolvency in capital and rupturing of the capital chain.The research on the risk of debt financing is extremely necessary.This article uses the combination of theoretical analysis and case practice analysis.Firstly,the concepts and theoretical bases of financing,financing risk and risk management.Then introduce the status and risks of debt financing of private enterprises in China in detail,which covers the development history,status and function of private enterprise,the reason and method of debt financing,the problems existed in the financing process,also the types,characteristics and causes of the debt financing risk.Then analysis of the causes of the debt financing risk.Huishan Dairy is the object of the case study.Firstly,the basic situation of Huishan Dairy and its industry overview.illustrating the ins and outs of Huishan Dairy.Then it analysis the risk of financing process of Huishan Dairy from the background,characteristics and composition.mainly explained the reasons for the risk of debt financing which broken capital chain of Huishan Dairy.Using data to prove that the single channels financing,unscientific planning of debt financing,irrational term structure of the debt financing,business risk and finance risk,over investment action are important factor.Thus forward countermeasures and inspirations for Huishan Dairy.Finally,this article propose corresponding guiding principles for risk prevention from the four side,government,financial institutions,private enterprises and social supervision.For government,the government-service mechanism should be strengthened,the market-economy reform should be deepened,the banking reform should be promoted,the financing of private enterprises and supervision system should be rationalized.For financial institutions,banks should strictly scrutinizes procedures and standards,rationally loans and supervises the usage,strengthens the credit risk assessment system and establishes early warning mechanism of financing risk.For private enterprises,It should make good financing plans,and reasonably determine the scale of financing;expanding financing channels,make rational use of financing resources;optimizing the structure of debt financing,reduce the cost of debt financing;raising the awareness of risk prevention,consider the internal and external environment of enterprises;enhancing the awareness of financial staff,build a good relationship between banks and enterprises;pay attention to the scientific nature of investment decisions,strengthen internal control,and establish a risk warning and control mechanism.For supervision,tranfer from spontaneous supervision to industry specialization supervision.