Research On Financing Problems Of Changsha Aotuo Machinery Co., Ltd.

As the basic cells of national economy, SMEs have always been the important force to promote sustained development of the national economy. In recent years, a growing number SMEs have become the largest and most dynamic business groups. Those SMEs contributes 60% of the GDP, more than 50% of tax, create 80% of China's urban employment. However, SMEs are extremely sensitive to macroeconomic environment. Moreover, SMEs are in small scale, have poor financial management and low corporate transparency, often cause capital chain tension or even bankruptcy because of the difficulties to raise funds. Financing difficulties have been the biggest problem that hinder the development of SMEs.Therefore, it is significant to do research on financing problem.As one of the SMEs, Changsha Aotuo machinery Co., Ltd is also facing financing problem. This paper takes Changsha Aotuo machinery Co., Ltd as a case, Describing its financing situation from four aspects including environment, methods, capability, structure. Analyzing the financing problems of Aotuo machinery Co., Ltd and its reasons, as well as come up with some suggestions. Not only contribute to the development of Aotuo machinery Co., Ltd, but also be beneficial for other SMEs.T his paper thinks this company is facing financing problems including being inadequate at internal financing capacity, being irrational at external financing structure, high financing costs, meeting difficulties in obtaining long-term loans. The reasons for the financing problems are as follows:the mismanagement of accounts receivable influence the raise of internal financing capacity, not being aware of the necessity of broaden the financing channels, not being aware of the new financing methods to decline financing costs, being inadequate at internal management. To solve the financing problems of Changsha Aotuo machinery Co., Ltd, this paper come up with the general principles for this company, besides, it should adjust its credit policy, using new financing methods to broaden financing channels as well as perfect its internal management.