Sensitivity Analysis Of Bank - Enterprise Relationship To Financing Cost Of Small And Medium - Sized Enterprises

For small and medium-sized enterprises(SMEs), the bank loan is the most important financing channels. Because of their limited size, SMEs in the credit process will appear serious information asymmetry. In order to reduce credit risk caused by information asymmetry, the bank will seriously consider the loan applications, or to improve their lending rates. The present study found that in the case of non-transparent financial information, good and stable relationship between banks and enterprises can help SMEs to obtain bank loans, and reduce borrowing costs.This article introduces the current domestic SMEs criteria for the classification firstly, emphasizes the important role of SMEs in the national economy, gives a brief description of current situation of financing and explains the reason. After a literature review, the article sorts out the definition and characteristics of relationship lending, and summarizes literature from the theoretical and empirical. In the main part of the study, we collect data from 2014 financial report of enterprises in National Equities Exchange And Quotations, select the length of relationship between banks and enterprises, the number of relationship between banks and enterprises, the background of corporate executives to measure the relationship between banks and enterprises, use SPSS to finish multiple linear regression for availability of credits and loan rates, then get the following conclusions: the length of the relationship between banks and business positively associated with availability of credits and negatively associated with loan rates; the number of the relationship between banks and business negatively associated with availability of credits and positively associated with loan rates; financial background of corporate executives will also help enterprises to obtain favorable loan funds. Finally we make a suggestion from levels of enterprises, banks and government departments, and proposes directions for future research.