The Research On Small And Micro Businesses Financing Problems In China

Small and micro enterprises occupy a special position in China’s economy andsociety. It plays an irreplaceable role to increase employment, to achieve an activemarket, to improve people’s livelihood and to promote economic restructuring. Thus, ithas become a nationwide concerned issue of solving the financing problem of smalland micro enterprises. The paper focuses on the dilemma of small and microenterprises financing difficulties. Generally, small and micro enterprises have smallscale and fixed assets occupy a low proportion in total assets. They mainly purchasethe place of business, equipment and other fixed assets by way of leasing or hiring.Also, venture capital usually comes from personal savings or family-raised funds. It israre to access bank credit and other financial support by standard approach.Furthermore, the core competitiveness of small and micro enterprises often manifestedas intellectual property and brand value of intangible assets, relatively, little of themcan be used for mortgage of fixed assets. The majority of small and micro enterprisesare in a higher degree of competition in the industry, thus, they are vulnerable tomarket conditions, national policies and the economic cycle fluctuations. They hold theweak ability to resist risks as well.Solution to the financing of small and micro enterprises must be difficult toresolve the relationship between government support and market principles, balancedsocial and economic functions of the small and micro enterprises. Many peopleadvocate the financing difficulties of small and micro enterprises and social stability,expansion of employment linked to over-emphasize its social function and ignore itseconomic function, the solution is a financial contribution or bank low-interest loans,either to increase the special financial grants fund or tax concessions that lay emphasison banks to provide low-interest loans. Practice has proved that rely on financialcontribution to meet the financing needs of most small and micro enterprises isunrealistic; After all, the financial funds are limited, and many other aspects of rigidfiscal expenditure, the tax benefits of limited amplitude. Commercial banks face hightransaction costs and high risk loans to small and micro enterprises, rely on lowinterest rate loan loss conditions is not sustainable. Chapter9papers actuallysupporting angle from the relevant recommendations.This analysis is not to deny therole of government support, in fact, Chapter relevant recommendations. The fundamental ideas, but this is not a solution to the financing of small and microenterprises, government support can only be limited and complementary to solvedifficulties in financing small and micro enterprises fundamental idea is to marketprinciples.Banks in the actual operation is basically a mortgage or secured loan, loans forsmall and micro enterprises. A number of small and micro enterprises due to the lackof effective asset as collateral, even with growth potential, can not get bank loans.Most of the small and micro enterprises for loans amount, time, interest rate concernsComparatively speaking, the interest rate is not very sensitive to what they need mostis timely, easy access to funds. Commercial banks should be directed to the specificsituation of small and micro enterprises qualitative and determined according to thenature of the financing methods and channels.Due to the simplification of the internal organizational structure of small andmicro enterprises, entrepreneurs entrepreneurs charisma often become a key factor tomaintain the stability of small and micro enterprises. Entrepreneurs not only the useof personal entrepreneurship plays a discovery market, market creation, these centralrole to cope with uncertainty, but also with the quality and capacity of the individual toestablish a hierarchical interpersonal structure, which is flexible small and microenterprises modifications, management and production of the "origin" of all theadvantages of low cost.In this paper, the relational financing is analysed deeply in Chapter CT, which isparticularly important for small and micro enterprises. Small and micro enterprisesrelational financing depends on a banking enterprise in the long-term cooperation"soft" information gathered by the loan officer in the bank within the organization"soft" information is not easy to observe, not confirmed, is not easy to transfer, due to"soft" information transfer costs over, the relationship lending decision-making powermust be delegated to hold the soft grass-roots managers and loan officers. Productionof soft information is non-financial information and non-standardized information isfrom the business analysis of the operators of credit, borrowers and shareholdersconduct and repayment ability. Small and micro business loans, may wish to refer tothese standards to improve and enhance their own business is credit capacity.In addition, it can be analysed from small micro-enterprise where industryassociations and industry associations. The fifth chapter discusses the supply chain financing to solve the financing problem of small and micro enterprises. Supply chainfinancing model jumped out of the traditional limitations of a single enterprise,standing the global and height of the industrial supply chain, and financial products tomeet the small and micro enterprises. The sixth chapter is to analyze the financingproblems of commercial banks relying on the industry association for small and microenterprises.Commercial banks is the solution to the leading force in the financing difficultiesof small and micro enterprises, but must also be combined with other sources offinancing. The third chapter of internal financing and external financing problems inone by one analysis, space is limited, not much research on private financing. Chapter4is the financing of small and micro enterprises with the capital market. By theGEM lower barriers to entry, you can make the technology-based small and microenterprises to have the opportunity to enter the capital markets for financing. Theeighth chapter analyzes the importance of the issue of small micro-enterprise lendingrate pricing, and gives a loan interest rate pricing model. Chapter9from increasetheir ability Financing System, differentiated policies and create a good financingenvironment Quartet operational policy recommendations to face to ease the financingdifficulties of small and micro enterprises.