It can be divided into two categories: debt financing and equity financing. The former includes bank loans, bond issuance, notes payable and accounts payable, while the latter mainly refers to stock financing. Debt financing constitutes a liability, and the enterprise must repay the agreed principal and interest on time. Creditors generally do not participate in the business decision-making of enterprises and have no decision-making power over the use of funds.
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Financing funds as the first driving force and continuous driving force of enterprise economic activities. Whether an enterprise can obtain a stable source of funds and raise the funds needed for the combination of production factors in time and in full is very important for its business development. However, the biggest obstacle to the development of private enterprises is the financing dilemma.
Private enterprises in China are mainly labor-intensive and low-tech industries, and manufacturing, wholesale and retail catering alone account for 75% of private enterprises. The vast majority of private enterprises, whether in the initial stage or in the development stage, mainly rely on self-accumulation and self-financing to develop.
However, due to the low management level, small production scale and weak profitability of these enterprises, their further development is still restricted by the serious shortage of funds. Private enterprises have huge capital demand, however, the loans obtained from banks are less than 2% of the total bank loans; Private enterprises that raise funds by issuing stocks only account for about 9% of listed companies in China stock market, not including those enterprises that buy shares of other listed companies at higher prices and list them in a curve;
Its share in the bond market is almost zero. The financing difficulties of private enterprises are highlighted by the difficulties of small and medium-sized enterprises, central and western regions and small towns, which is precisely an important link in our economic development that needs to increase support.