The Analysis And Countermeasures Of Domestic SMEs’ Financing Issues

With the rapid development of China’s economic, SMEs are showing a rapiddevelopment trend and sharing growing importance in the daily economic activity. SMEshave become an indispensible part of our national economy yet still facing complexproblems, and the most crucial one is financing issue.This paper first reviews the related research status of SMEs financing, then analyzesits present problems and causes. This paper also inquiries into the liquidity demand ofSMEs in Shandong province. Through drawing lessons from the financing experience ofthe United Kingdom, the United States as well as Shandong province, this paper putsforward suggestions to solve the problems from four aspects of government’s policy,financial institutions, guarantee methods, and SMEs themselves.The research shows that the financing problems of SMEs are: huge funding gap, highcost financing, lack of financing means, in sufficient endogenous financing, anddifficulties in bank financing. Financing issues of SMEs can be caused by two differentaspects of reasons, internal ones such as lack of credit, high operating risks, and lack ofassets pledged, and external ones such as imperfection of financing policies and servicesystem, financial institutions, and capital market. With the financing experience of theUnited Kingdom, the United States and domestic SMEs in Shandong, this paper providesa detailed analysis of the financing problems of SMEs in China and severalcountermeasures in order to alleviate the existing circumstances for SMEs.