Research On Financing About Technological Transformation Of Traditional Industries

Traditional industries are the backbone of China's national economic development. Facing economic development and the increasingly fierce market competition, traditional industries having been at a disadvantage with outdated technology. So technological transformation has been becoming a matter of primary importance for upgrading the industrial structure. Lack capital is impeding the development of traditional industry during the process of technology reform. At present, China's traditional sources of funding for technological transformation include government investment, internal fund-raising, bank loans, use of foreign funds, capital market financing .However, these financing methods have been limited by many factors: Internal fund-raising is restricted by expand scale of enterprise, the Government put the limited funds , loan financing is not endless and foreign investment has tended to cycle short, high-efficiency industries, and the capital market financing can not be a stable and effective source of funds while China's capital market development is not ripe, not standardized. In a word , the above-mentioned financing channels for technological transformation could not meet the demand of funds. Under the circumstances of the growing demand for funds, we must make full use of a wide range of financing channels, through the market or non-market form of access to finance.Finance lease is a lease-trade type which combines trade and credit. It also is a channel of financing. In essence, finance lease is leasing of equipment investment, which is an in-kind of financial intermediation. The advantage is: simpler and faster procedure, expanding enterprises sources of funds, lower financing costs and reducing capital occupier. Thereby finance lease improve the efficiency of use of corporate funds. For technological transformation about traditional industries, the biggest advantage of finance lease is fixed assets intermediation instead of financial intermediation. Equipments financing will settles effectively the problem about equipments renovation. Moreover, lower financing cost and simpler procedure will make finance lease become a new choice for the technological transformation.