Study On Small And Medium-Sized Enterprises' Financing Mode And Decision

Financing is a key to small and medium-sized enterprises(SMEs)'development. Domestic SMEs face many financing problems, such as short of R&D investment, irrational investing and using structure, huge gap of financing demand, etc. Difficulties in finance is a main obstacle on the way of SMEs'development . Therefore, selecting proper financing mode in order to accelerate the integration of capital and advance are meaningful to domestic SMEs. This paper integrates theoretical analysis and case studies to analyze financing problem of SMEs to provide some practical information to thounds of SMEs in China.The writer firstly retrospect the financing theory of capital market. Literature summarize is made separately in terms of banlance of MM theory, financing theory and pecking order theory. Then introduce Characteristics of SMEs and main cause of financing difficulties on the basis of given standards to defining SMEs. The growth process of SMEs are divided into five stages: Seed, Start-up, Development, Expansion and Maturity. The writer probe into unique Characteristics of five different stages and corresponding financing solution. Following is comparative analysis of various mainstreaming financing channels with their advantages and shortcomings. The writer also summed up the internal and external factors on the impact of the financing decision-making.Case Study part focus on a typical Chinese SME , analysis financing needs and discuss possible options of financing mode as well as design financing model. In the last part of this paper draw conclusions and make recommendations for the development of SMEs in China.