Study On China’s Real Estate Financing Strategies Based On The Theory Of Corporate Life Cycle

In recent years, with China’s sustained rapid growth, rising income levels and theaccelerated process of urbanization,our real estate industry has made rapid development,which has been in a dominant position in the national economy. But with theintroduction of a series of national macro-control policy, real estate corporations whosemain financing ways are the bank loans generally face the unprecedented pressure, soreal estate financing in China is not optimistic. Therefore, broaden the financing waysfor real estate companies and establishing a more rational financing system is animportant prerequisite for promoting sustained and healthy development of China’s realestate industry and the steady growth of national economy.On the condition of the change of macroscopical policies,the main contents of thispaper are as follows:firstly,we study on the present conditions and the problems in realestate corporations.And propose that the real estate financing has faced many problemssuch as real estate over-reliance on bank financing loans;capital structure isirrational;the debt ratio is too high;the real estate direct financing is difficult and so on.Secondly, we analysis the current widely used in China’s real estate financingcompanies such as internal financing, bank loans, bond financing, public financing andtrust funds.We study the advantages and disadvantages of these ways.Also,we study thepopular financing ways in abroad like Real Estate Investment Trusts and mezzaninefinancing. Thirdly, on the base of the corporate life cycle theory and the theory ofcorporate finance we considered that the financing strategy should include the stage ofthe cycle of real estate, so that the strategies will be more scientific.This paper divided the real estate corporations into four stages from the perspectiveof the capital,and according to the characteristics and operational risks we proposedfinancing strategies: in newborn period,we should choose inner financing and make useof venture capital; in growing period，we should choose the equity financing as the mainways,also we can use debt financing as a supplement; At maturity we advise the debtfinancing as the main ways,also we can use equity financing as a supplement.Besides,in this period we suggust land acquisition strategy. For the enterprises which are declining we may choose short-term credit and venture capital funds.The purpose of thispaper is to solve the difficulties because of the changes of national financial polities andthe risks of funds shortage; Reduce the risk of bank credit, and promote the real estateindustry; make good use of scientific funding strategies in order to achieve large-scaledevelopment in the real estate corporations.