Private enterprises financing difficulties and the solution strategy discussion

Summary: financing is an important process of enterprise Development issues, only the clever use of corporate financing strategies in order to obtain sufficient funds, to seek a broader space for Development, the pursuit of business objectives more efficiently present the Chinese private enterprise financing obstacles, from business themselves, financial institutions, national governments to start coordination of reform in three areas to be addressed.

Keywords: private enterprises, financing strategies, financial management

First, the Development of private enterprises Profile
Since reform and opening, the private economy has achieved rapid Development, China's socialist market economy has gradually become an important part of public economy and a useful complement to the growth of gross national product, an active market economy, increased state taxes and all other aspects of solving the employment problem made a significant contribution.

Seventeenth Party Congress clearly must unswervingly encourage, support and guide non-public economic Development, promote equitable access, improve financing conditions, get rid of institutional barriers and promote individual and private economic and SME development, etc. This shows that , private enterprises have become the concern of the Chinese government to support the development of the object. With the constant improvement of the market economic system, private enterprises will be to promote China's economic development and an important force in maintaining social stability.

Second, the causes of difficulties in financing of private enterprises
Capital is the life source of forward momentum, is a prerequisite for business survival, development. Currently, the major financing channels for enterprises, including internal financing (such as an inventory of existing assets within the use of retained earnings and profits and taxes payable and other financing and external financing ( such as loans from financial institutions, issuance of securities, to attract foreign investment, leasing, commercial credit, project financing, leveraged financing to buy, can be described as broad channels, but in China's current economic environment, poor access to financing private enterprises, limited in scope to raise as a constraint to the development of private enterprises an important factor, resulting in this problem occurs because of the following three aspects:
(A limited private enterprise's own situation
Late start of private enterprise, its development is still in their infancy, mainly reflected in the relatively small scale, the company's business operations rely mainly on individual accumulation of limited capital, lack of overall talent of high-quality, enterprise Innovation is not enough; business is not standardized, transparent financial system, lack of effective internal oversight mechanisms, a sense of credibility, lack of credit-based, interest owed, indebtedness, and other non-performing loans is more prevalent these imperfect undoubtedly increased the funding to private enterprises the difficulty of narrowing the scope of financing.

(Two financial institutions to provide credit limit
Business financing are numerous, but the private enterprises of financing options are limited, in addition to relying on internal financing, mainly through loans from financial institutions, but the current financial institutions to private enterprises (especially small and medium private enterprises) has provided credit funds and insignificant. The reason:
1. Smaller private enterprises, the nature of loans mostly for working capital, loan demand of high frequency, a small number of the objective increases the management cost of bank loans, so the current financial system, the state-owned commercial banks in the face of private enterprise Loan requests are often not supported. Strict lending authority, the number of credit conditions, cumbersome loan approval process, loan financing for private enterprise to discourage this channel, according to the statistics, the private economy on the national product (GNP new part of the contribution has reached 60% , but only a 30% financial support.

(2) to provide loans to small and medium financial institutions the ability of smaller, though small and medium sized financial institutions to private enterprises to provide a corresponding loan services, but because of its small scale, less capital and credit strength is not strong, limited operating area characteristics, so in the face of the financial needs of private enterprise, appeared to be inadequate.

3 private enterprises vulnerable to the impact of market conditions, operation is fluid and can not accurately predict the future economic situation, it is difficult to meet the Bank emphasis on money "efficiency, safety, liquidity" requirements and private enterprises widespread credit quality problems makes some services, although the concept of the private economy of state-owned commercial banks prefer to lend to state-owned enterprises in question, but also unwilling to lend to well-run private enterprises, private enterprises, thereby increasing the difficulty of co-operation with the bank.

(C) the national government's limited policy support
Currently, the Chinese government to support the development of private enterprises lack the financing environment for private enterprise failed to provide supporting services in place: On the legislative front, the lack of unified standard of private business legislation, support policies, the lack of proper Laws and regulations do protection in the management, implementation of the policy in place to support the implementation of measures greatly reduced in the macro-control, lack of effective means to guide financial institutions to strengthen and improve the private companies provide financial services in supervision, government departments have failed to good perform oversight functions, resulting in the development of private enterprise in itself is not standardized.

Third, solve the financing difficulties of private enterprise strategy
(An aspect of their own
1 sound enterprise system, improve the governance structure. Private enterprises should establish a sound institutional, procedural, standardization of the modern enterprise system, efforts to refine and improve enterprise operational mechanism, to strengthen financial management, standardized financial behavior, and establish a scientific financial system , internal control and supervision system, building corporate credit culture, enhance corporate reputation, through joint-stock reform, sale, merger, reorganization, joint venture, joint ventures and other effective ways to continue the reform and seek survival and development of the road.

(2) reduce business risk and improve liquidity. Established in order to achieve operating cash flow growth for its core business objectives, and strive to tap their own potential to enhance the accumulation of self-awareness, to expand the scale to provide a solid financial foundation, establish reasonable financing strategies , clever use of off-balance sheet financing and other financing instruments to reduce financing costs, to ensure continuous funding chain, greatly improve the level of production Technology, improve labor productivity, a combination of financing and financial matter, improve ability to resist risks.

3. To strengthen credit risk management, enhance corporate reputation. To establish a credit risk management organization system, development of corporate credit policies and risk management strategies, improve credit risk management and restraint mechanisms, strict examination and approval of high risk transactions, build customer credit files, standard customer contracts signed operational processes, developing customer credit policies, establishment of accounts receivable management recovery mechanism.

Links to free download http://www.hi138.com (two financial institutions
1 with money supply model, to improve financial services. In theory, the supply of indirect financing of private enterprises, there are four models: the first entirely by the supply of state-owned commercial banks, the second entirely by small and medium financial institutions to supply the third kinds of state-owned commercial banks, mainly small and medium financial institutions, supplemented by a fourth places mainly small and medium financial institutions, supplemented by state-owned commercial banks based on my analysis, the current status quo is essentially a third supply mode in the foreseeable future, this basic pattern will not change, therefore, the state-owned commercial banks should define their responsibilities, according to the actual development of Chinese private enterprises, reform the traditional time to serve a range of state-owned enterprise based system approach.

2. Adapt to market needs, the reform of management system and mode of operation. To change the existing corporate credit rating using the same standard conditions, to develop financial services in line with the characteristics and requirements of SMEs, the SME credit rating standards, reforming the existing loan approval process the establishment of credit system for SMEs, policies and procedures, give full play to the state-owned commercial banks, institutions, networks, personnel, information, and other areas, the establishment of SME information database, data sharing of information resources for SMEs to provide industry analysis, decision-making consulting services, with the Government's policies, a good private enterprise financial management staff.

3. To develop local small and medium financial institutions. Local small and medium financial institutions, including city commercial banks, urban credit cooperatives, local property rights trading market for SMEs, SMEs and local bond markets venture capital company. This local financial institutions have to information superiority to provide services for SMEs, small and medium financial institutions and help solve the problem of information asymmetry between small and medium enterprises, while actively develop non-state-owned and small and medium financial institutions, but also to further deepen financial reform, to break the monopoly of state-owned banks promote the establishment of healthy competition among banks.

4. Improving private enterprise credit guarantee mechanism. SME credit guarantee is developed the highest and best usage of a financial support system. Foreign special services fund for small businesses are mainly three types: First, small business credit guarantee funds, such as Japan has 52 credit guarantee company, the second is a specific purpose funds, such as Italy's "Technology Innovation rolling fund" to support SMEs in technological Innovation, the three mutual funds for small businesses, small businesses such as Japan's "own till "corporate membership at any time are likely to get interest-free loans from, and does not require collateral and guarantees, and we can learn from the experience of mature countries, according to <<Guarantee Law>> and other state Laws and aggressive to the pilot, according to the operation, and the principle of risk diversification, to develop in line with China's national conditions of private enterprise credit guarantee system and the credit guarantee system.

(C National Government
1. Emphasis on sustainable development policies to improve the financing environment for small and medium enterprise development in developed countries can learn from the successful experience of the development of private enterprises to establish long-term, systematic strategy and planning. To re-develop criteria for the classification of SMEs, tax incentives for private enterprises to be , financial subsidies, interest payments on loans and other preferential policies. can establish a single "National SME Development Fund", scattered in various departments and areas of funding and bundled with the implementation of earmarking funds for SME development long-term, stable funding source while constantly improve the financial legislation to regulate financial activities, improve the financing environment for private enterprises.

(2) improve the GEM market, support the national capital. Rely on macro-control capacity, continue to guide and standardize the Chinese capital market, improve the stock market as soon as GEM, a small regional capital markets, venture capital markets, to improve the use of the combined effect of small corporate financing environment by GEM to solve in the middle and late stage venture financing problems of SMEs, through the regional small capital market reach into the Growth Enterprise Market of the eligibility criteria to provide financing for SMEs through venture capital market for the early stages at the start of private equity capital for SMEs by establishing a just and open, three-dimensional, multi-level capital market and improve the system of direct financing of private enterprises.

3. Create an environment conducive to scientific and technological achievements, conducive to private enterprise development policy environment. First, fiscal policy, the state ownership in enterprises of all types on the basis of a fair tax increase concessions to private enterprise efforts to reform-owned, partnership not only the corporate income tax and personal income tax practice, followed by further removal of restrictions on private introduction of talents: first, to attract private enterprises to further break the current college graduates to pay the training fee requirements; second, public security, personnel, labor, and civil affairs departments to coordinate the resolution of the account of private business people, job classification, housing and education of their children, the third to efficiency standards, equal treatment of all types of enterprises, private enterprises will be part of high-tech enterprises into national policy to support the plan, the fourth, the business scope and market access to non-discriminatory, based on appropriate policies to relax the requirements of private enterprises in the front to give national treatment to foreign private enterprises national treatment is the best policy.

References:
[1] Tong Yan, Zhou Li. Capital accumulation [M]. Beijing: China Renmin University Press, 2006.

[2] Sheng-li. Innovative financing system of private enterprise [J]. Wuhan Finance, 2005, (9.

[3] Ge Zhaoqiang. Crack the key to the problem of financing SMEs, where [N]. Shanghai Securities News ,2009 -08-26 Links to free download http://www.hi138.com