Growth Cycle Theory And Private Enterprises Financing Model Study

The Chinese private economies in our country have developed rapidly and are playing more and more important part in our national economy. But for a long time, financing difficulties is widespread in private enterprises. Although most of the private enterprises have incentive to expand their capital they have to rely on the accumulation of internal capital fund. The lack of external finance has greatly confined the growth of private enterprises. Therefore how to solve the financing difficulties of private enterprises become the common concern of government, enterprises, and scholars.Based on business life-cycle theory and financial growth cycle theory the growth of private enterprises will be divided into three stages: Start-up period, growing period, maturity period. And here we have a research on how to promote the development of private enterprises under the existing economic system and financing environment, through the existing financing pattern. The risk will be taken as a basis factor for stages division. The risk evolution there means the operating risk, information risk, and financing risk interacts on each other. The private enterprises have different financial needs and risk characters at different stages of the life cycle. So we should build up a different capital structure and adopt a different financing mode and policy to support.The thesis is following the logic line of "what is the current financing state in Chinese private enterpriseâ†'why is thatâ†'how to solve it. Combined theoretical analysis with positive study and case study this thesis explore the financing needs and financing model of private enterprise under the different life cycle stage and provide the constructive solution on how to establish a reasonable capital structure and choose a suitable financing model, in order to ease the financing difficulties of the private enterprises.