| Since1998, the housing reform, China’s develops rapidly. After ten years ofdevelopment, real estate industry continues to expand. It plays a role which can’t beignored in enhancing national competitiveness. The status of the real estate isbecoming increasingly important in the national economy. Real estate is a pillarindustry in national economic development, which determines the rapid developmentof China’s growth, employment structure, income levels and competitive position inthe international economy. Development of real estate industry leads to the rapiddevelopment of related industries. We can see that at this stage, increasing investmentin the real estate industry to maintain its healthy and stable development will be ofgreat significance to macroeconomic developments.It needs a steady stream of funds to support the rapid development of the realestate industry. Real estate industry requires a lot of upfront investment. It has longinvestment cycle, slow flow of capital and high investment risks. Construction ofChina’s financial system is not perfect. China doesn’t have enough small and mediumfinancial institutions to provide services to small and medium real estate companies.Financial institutions have a few financial products which limits financing channelsfor small and medium real estate loans. Direct financing in capital market has highrequirements. Smaller real estate companies have small assets and instable earnings.Direct financing in the capital market has a higher threshold, it has higherrequirements for the size, profitability and solvency of the financing business. It isdifficult to reach the threshold of capital market financing. Therefore, different fromother industries, the real estate industry is facing financing problems.Dingli Real Estate Development Enterprises is located in Hunchun which is aprivate enterprise. The company’s main business is engaged in real estatedevelopment and sales. The company set up for a short time. It has small scale and instable profitability, so which is a typical small real estate company.Based on theabove analysis, the paper takes Dingli Real Estate Development Enterprises asexample. We analyze the current situation in the financing path and problems of smalland medium real estate enterprises. The results show that the real estate companymainly relies on internal financing, external financing is limited. In the externalfinancing path, the real estate company chose debt financing first, and the financingpath is single which rely mainly on commercial credit approach. The company can’tfinance directly in the capital markets, because the financing path has been greatlyrestricted. The reason that causes problems in Dingli Real Estate DevelopmentEnterprises’ financing path is not limited to the company’s own. Our financial systemis not perfect, and the construction have problem in the GEM capital markets.Therefore, in order to broaden the financing channels for real estate industry, Chinashould strengthen the construction of small and medium financial support system, andwe should establish development fund for the development of small and mediumenterprises. We should establish credit guarantee system for small and medium realestate companies. Meanwhile, China should improve the construction of the existingGEM capital markets to attract more small and medium enterprises to enter the GEMcapital markets.Previous research on financing path is restricted to financing of SMEs in general,not limited industries. The paper is based on the analysis of the real estate industry,and we take Dingli Real Estate Development Enterprises as an example. Our researchis more specific, which can provide certain reference significance for the developmentof small and medium real estate companies. |
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