External financing difficulties for SMEs Analysis and recommendations

Abstract: This article first analyzes the importance of SMEs in the national economy, and then analyzes the reasons for the difficulty of external financing for SMEs, and finally from both SMEs and the government itself made a few suggestions.

Keywords: external financing bank credit for SMEs

First, the importance of SMEs

SMEs have become a support and promote economic growth, an important force to ease employment pressure. With the development of SMEs, their demand for capital is also growing, but in the current international financial crisis, the financing of SMEs , more prominent problem in getting loans, how to provide better support for SMEs, has attracted great attention from all sectors.

At present, SMEs account for more than 99% of the total number of enterprises, creating the final product and service value equivalent to 60 percent of gross domestic product around the same time, SMEs provide more than 75% of urban jobs. Laid-off workers of state-owned enterprises 80% were re-employed in small and medium enterprises, SMEs and a number of non-public economy has become an important channel for the employment of college graduates, to ease the employment pressure. In addition, 65 percent of China's invention patents, 75% of enterprises in technological innovation, 80 % of new product development, by SMEs and non-public economy completed.

However, SMEs have a bank loan resources less than 1 / 5, and that these funds are basically short term, mainly used to solve temporary liquidity, rarely used for project development and expansion of reproduction, etc., small businesses are more difficult to obtain long-term, stable funding. According to statistics, only 2% -3% of the SMEs in order to get more than two years of fixed asset loans.


Second, the reasons for external financing difficulties

1.'s Own sense of credit and operational risk greater weakness. SMEs, small-scale, less equity, more debt, production, backward technology, business faces greater risk, while bank loans increased to strengthen the risk management accountability so there are many grass-roots bank "credit crunch" mentality, the loan officer in order to avoid future corporate default risk, we strictly control loans to SMEs, in order to reduce bad debt risk. coupled with a weak sense of SME credit by many SMEs awareness of repayment weak, personnel factors, repayment ability, banks are more willing to lend to large enterprises with good credit, so the kinds of financing small businesses face great difficulties.

2 Financial opaque, the lack of sufficient collateral assets and many financial transparency is low and does not regulate small and medium enterprises, small and medium enterprises with more poor repayment, repayment of consciousness, these companies bank's financial position, results of operations, use of loan funds and development prospects is difficult to understand, not easy to provide credit support. In addition, SMEs lack adequate collateral, security is very difficult to find, most of them do not meet bank lending criteria. If you can not provide collateral and guarantees, is difficult to meet due to small and medium private enterprises financial institutions, loan terms, access to credit dramatically reduced.

3. financial crisis due to financial crisis, market volatility, energy and raw material prices, production costs increase, and appreciation of the renminbi, making the reduction of foreign demand, export volume reduction, which encourages small and medium financing needs of enterprises In addition, banks themselves are sub-debt, coupled with the real estate mortgage loans, a substantial increase in bad debt, to control their risk from the point of view, very serious credit crunch, bank loans to SMEs from the cost of greatly increased. turn affixed to the free download http://www.hi138.com Third, the recommendations on corporate external financing:

From the government point of view:
Smooth financing for SMEs can not do without government support and support the Government in improving SME financing system and has played an important role.

1. Improve relevant Laws and regulations. The Government should improve the legal system for SMEs, to further improve the relevant policies and regulations. To <<Promotion Act>> as a guide to develop <<>>,<< SME financing SME Guarantee Law France>> and a series of Laws to improve the matching status of SMEs, to ensure that SMEs interests, so that a variety of financing channels for SMEs have a legal basis.

(2) improve the government's credit guarantee system for the body. The establishment of risk prevention mechanism, government at all levels should arrange some special funds, the establishment of credit guarantee compensation funds to improve SME credit re-guarantee system, the establishment of re-guarantee fund to help guarantee agencies spread risk and encourage participation in different economic sectors of the capital guaranteed investment company, a diversified multi-level credit guarantee system, to meet the requirements of the SME credit guarantee institutions, especially some smaller credit guarantee institutions, giving policy support .

3. Establish and improve the financial system for SMEs, a single dependent on bank financing of SMEs to change the situation.

On the one hand, we should actively develop small and medium state-owned banks to support the bank's credit measures to expand deposit and loan business for SMEs and increase investment loans other hand, according to the specific circumstances of each region, the establishment of various small and medium financial institutions and improve the existing banking functions, build a new financial system. In addition, for small and medium enterprises at different stages of development provide different customized financing products, increase financial product research and innovation, increase credit support for SMEs and service.

4 to give more financial support for SMEs, such as tax incentives, financial subsidies, preferential loans, and some gaps between high-tech enterprises, the state can allocate more of the special financial support, so as to provide a good SME financing protection.

From their point of view of SMEs:
(1) to strengthen faith and build a transparent and true financial system, reducing the information asymmetry. Enterprises to effectively improve their credit awareness and credit standards, discipline, emphasis on integrity, social responsibility, good corporate image.

(2) expand the financing channels, various financing and gradually regulate the private financing, to broaden the financing channels for SMEs, is to solve the financing difficulties of SMEs complement pathway in the context of the current financial crisis, diversifying financing sources, will help enterprise wide absorption and utilization of idle funds, to get good financial support.

(3) regulate the internal management and reduce the amount of funds used. Enterprises to carry out production according to market changes, lower raw material, transportation costs, reduce unnecessary capital expenditures, minimize inventory, implementation of standardized production, improve production and efficient use of funds, companies To sell products in a timely manner, return the funds to improve the capital turnover rate, in addition to accounts receivable management should be strengthened to reduce bad debt rate, thereby reducing the risk, improve operational efficiency and financial capacity.

(4) to improve their competitiveness and ability of independent innovation and improving the quality of management and employees. SMEs only continue to improve their management ability, in order to have enough profit to repay the loan, but also to obtain bank credit, so as to fundamentally solve the financing difficulties The question should not blindly invest funds to ensure reasonable operation of the chain.


References:
[1] Fu-feng, Zhang Xu. Tightening monetary policy, the issue of SME financing. Accounting Communications 2009 (17)
[2] Jin Yingchun, Lu Jiangtao Zhejiang SME financing difficulties and the solution causes. CPC Hangzhou Municipal Party School 2009 (03) Links to free download http://www.hi138.com