Analysis Of Implementation Mechanism And Comparative Advantage Of The Supply Chain Finance

Obviously, small and medium sized enterprises play an important role in the national economy. The proportion of SMEs is more than90%, and SMEs’GDP account for more than50%. But for most SMEs, funding gap restricts its development. For SMEs, both external financing and internal financing are difficult. Getting funds through stocks and bonds are difficult, and then accesses to financing from banks are not easy either.In the modern economy, the competitions in the market are competitions between the industrial chains. Supply chain finance makes full advantage of the trading background to provide financial support for SMEs in the supply chain. Supply chain finance has changed traditional credit program. Relying on the trades with the core business, SMEs can get funds from banks through prepayments, trade receivables or inventories to solve the difficult problem of financing.Based on the study of supply chain finance, this paper focuses on how to solve the financing difficulties of SMEs, and the process and advantage of the supply chain finance to make recommendations for the current problems in supply chain finance.The first part includes researches on the status of SMEs, sources of financing for SMEs, and explanations of the Deep-seated reasons of financing difficulties.The second part introduces the concept of supply chain finance, and compare with traditional financing in risk mitigation measures and the sources of repayments.The third part introduces the implementation mechanism of supply chain finance. The forth part make use of model and case study to explain why SMEs can expand sales and save financing costs with the help of the supply chain.The fifth part analyzes the current problems of the supply finance and introduces suggestions to solve financing difficulties.