Analysis And Solution Of The Difficulties Of New Built Companies Might Face On Financing

There are always voices complaining about the difficulties of the SME (Small & Medium Enterprises) would face during financing, especially for the new built companies. It is a true that all the SMEs would face all kinds of difficulties when they try to financing today, and this article is to analysis what difficulties SMEs would face, how these problems arise, and finally come out with the solutions.First of all, the SMEs have to clarify what kind of enterprise they belong to and which stage they are in. To have a better understanding on that would help the SMEs to choose the way of financing and to analysis the possibility to acquire the support from bank.Secondly, to finance with a bank, SMEs have to understand how to work with them, Availability of financing for SMEs, is an enterprise group in different stages of growth the availability of a comprehensive financing. The efficiency of each group on the overall financial efficiency will change due to changes in the external environment. With the constant improvement of our financial system, financial instruments are continuously enriched. To optimize the financial ecology, a situation that may arise is. Financing of SMEs will be gradually concentrated to the initial start-up enterprise groups.Financing can be divided into four types. That is private debt, private equity, public offering of debt and equity financing public offering. For SMEs, rent through the public offering financing is difficult, start-ups are basically only able to finance through private channels. In the formal private debt financing, the banking system occupies a very important position. A variety of funds (company) operating in the specialized form of private venture capital. Formal private equity financing is the absolute main market. Of course, the private equity fund, in accordance with the rules governing the establishment and operation of non-bank financial institutions. Rather than civil initiated. Gray "Financial organization" Start-up of major defects in the informal finance market. Mainly in banks and private venture funds are on the start-up financing to support the system failure. Formal venture capital funds are not eager to start-ups. There are many reasons. Only from the financial point of view, the main considerations are:venture capital, compared with private individuals. General management of the Fund the amount of funds is much greater. Funding needs to invest in more mature companies; agency project managers are mostly professional money managers, their wages are often higher, difficult to employ a large a fund, the investment manager of a limited number of circumstances, to make the management funds are more fully utilized. An alternative strategy is to invest in larger projects; to invest in small projects, to conduct the same rigorous assessment and selection. Screening unit to the cost of small projects is often higher; venture capital funds are not used its own funds. But funds for owner-managed funds, investment control mechanism makes the more complex projects more stringent due diligence, which increased the cost of the screening considerations. One view is that, since the late 90s of the 20th century, as institutional investors, investment increases, the size of private equity venture capital fund growing, this trend is not the gospel of the entrepreneur. Should be said that the scale of becoming a great fund certain inevitability, it is not useless. With the pension funds, insurance companies and other financial institutions enough assets increases, under normal circumstances, the risk allocation to private equity investment will increase the amount of money. Moreover, with the expansion of the scale of economic activities will produce more and greater equity financing projects. Only with the growing scale of investment funds, private investment will be more regular shift business expansion stage or late stage of investment and poor state support start-ups will be more severe.Of course, the problem of difficulties in financing start-ups not only these two, there will be later in detail. But this is a start-up of the two most influential factors, difficulties in financing for start-ups because we have the basis of the analysis is also given to solve difficulties in financing from the method.