中小企业融资的-途径(英国硕士论文).doc

MANAGING FINANCEFinancing For SME： Best Ways to Raising Finance in Three Development StagesSupervisor: Dr。 David Brookfield Written Project By：Peng Ruoshu 200882430COSUMER MARKEINGMANAGEMENT SCHOOLUNIVERSITY OF LIVERPOOLContent1。Introduction22. Background33。 The barriers faced by SMEs43。1 Definition of SME43。2 Barriers faced by SMEs53.2。1 The size of the companies is limited53.2。2 The financing channel is limited63。2.3 Lack of ways to get finance help64。 Ways to Raise Finance in Three Development Stages64。1 Startup stage64.1。1 Seed Capital74.1。2 Angel Investor Funding74.2 Developing stage84.2。1 Loans from banks or other finance organizations84.2。2 Leasing or Factoring94。2.3 Venture Capital94.3 Mature stage104。3。1 Public equity and public debt105。 Conclusions116. References127。 Appendices131。 IntroductionThe most critical part to run a business is to get enough money to sustain it。 However, this is much harder than what it is sounds like, according to Brookfield （2001), it is quite common that SMEs cannot find reliable sources of finance， so， SMEs often miss investment chances. The aim of the study is to analyze the causes of difficulty in raising finance for SMEs and solve the problem by giving some advice. In order to reach the target， Firstly， the article will describe basic information about SMEs in raising finance. Then， explain why SMEs face difficulties in raising finance. Finally， give some suggestions to SMEs in 3 different development stages of the company。 In fact， several factors can influence the way for SMEs to financing， for example， the business performance of the company， the industry background of the enterprise or the capital efficiency of the company。 The reason why I focus on the Best Ways to Raising Finance in three development stages in that it is more practical and also， easier for SMEs to follow. 2。 BackgroundAlthough SMEs have small total resources compare with larger companies， it is more common and it also plays a key role in the UK economy. According to bank of England （2004）， SMEs account for 58% of private sector jobs in UK and the proportion is also high in many developing countries （Beck, 2006)， SMEs also have a high rate of productivity growth （Cosh， Hughes and Woods, 1999)。 Fraser (2004) found that only 44 of the SMEs found their sources of finance in the last 3 years and 11 of the SMEs rejected by banks or other organizations。 It is obvious that， raising finance is a big problem for SMEs in UK. Scholars suggested that the development of financing institution （Beck, 2006） and lending technologies （Berger， 2005) can help SMEs to solve the problem. Irwin (2010) also did some researches about the relationship between financing and genders； he found that it is easier for women to raise finance than men. 3。 The barriers faced by SMEs3。1 Definition of SMEBefore give suggestions， it is also important to make it clear what is a SME and why SMEs often cannot find effective ways to finance。 SME is stand for small and mediumsized enterprises。 Let us have a look at what is the characteristic of SME：Company categoryEmployeesTurnoverORBalance sheetMedium-sized 250= 50 m= 43 mSmall 50= 10 m= 10 mMicro 10= 2 m= 2 mSource: European commission, 2012The table shows that， SME is a company: Less than 250 employees Less than 50m turnover or 43m balance sheetSo， we can conclude that SME is a company no more than 250 employees， and its turnover or balance sheet no more than 50 or 43 respectively。 However， the definition may change as business developed。 3.2 Barriers faced by SMEs3。2.1 The size of the companies is limitedWhen we talk about SMEs， the first thing we should understand is the size of the enterprises. According to the graph below， large companies have more chance to acquire loans from banks than small and medium size companies。 It is mainly because SMEs have limited assets and other resources compare with large and medium companies， also， the companies have a weak capability to against crisis。 As a result of this， most banks do not like to give loan to SMEs. Also， SMEs cannot get huge amount of money by using other financing channels。 In fact， this the biggest problem faced by SMEs. Source: Own simulation based on the data provided by International Finance Corporation 20103。2。2 The financing channel is limitedThe entrepreneurs and economic environment （Angela， 2010） can influence SMEs to raise finance. Most large business can raise finance by listing on the stock market or issue bonds； they can take advantages of their reputation and collect money in a variety of ways。 However， SMEs can only rely on a limit number of the ways to finance。 Furthermore, raising finance is more expensive for SMEs due to the high interest rates。 3.2。3 Lack of ways to get financial help One of the most important factors which can affect SMEs to raise finance is lack of ways to get help。 Most SMEs do not have adequate information for raising finance （Laurinkeviciute Stasiskiene， 2011）， so they need someone to give them advice. According to Fraser (2004）, only 16 of SMEs asked for advice by someone with a qualification, which means 84% of the SMEs do not get the help they really need. In fact， unprofessional advice may lead to inappropriate financial strategies。4。 Ways to Raise Finance in Three Development Stages4.1 Start-up stage In the startup stage of the business， the company needs to use a seed capital or Angel inventor funding because its may face some problem in accessing most of the external finance。4.1。1 Seed CapitalSeed capital includes personal savings， bank loan， friends/family loan and mortgage on home。 Let us have a look at the following chart。Source: Fraser, 2004According to the chart， approximately 70 of the entrepreneurs spent their personal savings to found their business； about 17% of entrepreneurs established their companies by using bank loans。 The percentages of relying on a friends/family loan and mortgage on home are 12.7 and 6。5 respectively. So, if entrepreneurs want to start a new business， he should save some money or try his best to acquire a loan。 4.1。2 Angel Investor FundingSometimes, you may come up with a really good idea； however， you cannot start it because you do not get enough money。 Generally， you may need angel investors to sponsor your idea and you also need to give some original stake to your investors。 This is not easy， because you need to persuade your inventors to invest just an idea, so you should tell them how your idea will become a business and how long will it take. In facts， Some wellknow companies acquired angel investment at their start-up stage. For example， Google acquired 100, 000 dollars from Andy Bechtolsheim and Apple acquired 92， 000 dollars from Mike Markkula.4.2 Developing stage In developing stage， the companies are expanding fast， so, you need to use a variety if ways to finance。 Furthermore, the way you use mainly depends on how long and how much you need the money. Also, it is better to use mix finance channels rather than a single one。 （Example as following chart）Source: Fraser, 20044。2。1 Loans from banks or other finance organizationsA loan means you can borrow money from someone or organizations and you pay interest。 This includes loans based on assets or credit， generally, in the developing stage of the business； companies have more assets and may have a reliable reputation。 However， creditbased finance is a kind of shortterm loan。 If you need a long-term loan； you need assetbased loans （ex. Properties， machines or inventories). Furthermore， keep a good relationship with banks is extremely important because banks are always the most reliable resource to raise finance。 4.2。2 Leasing or Factoring Leasing or Factoring is also a type of loan, you may have to pay more interest than get credit or assets based loans； however， you can buy something with less money at a particular period. This is helpful because sometimes SMEs do not have enough money or they just want to keep a sufficient cash flow。 4。2。3 Venture Capital Angel investment is actually a kind of venture capital， according to the small business investment taskforce （2005）, 24 of the SMEs acquired venture capital， and on the other hand， only 12 of the SMEs can acquire an angel investment。 This may because the investors in venture capital tend to invest a founded company instead of an idea。 If you want to acquire venture capital, you have to make the investors believe that you can pay high profit back to them， because venture capital is a type of equity investment which means you share your profit with investors。 However， the chart shows that only 2 of the companies acquired an equity investment in the last 3 years， this may be because inventors like some hightech companies rather than other companies. 4。3 Mature stageIn the mature stage， companies develop slowly； however， its may owns affluent resources and has a dependable reputation. Banks may like to offer loans to most companies and public equity and debt is also a good way to raise finance in this stage。4。3.1 Public equity and public debt Public equity and public debt mean companies can issue bonds and stocks in order to collect money from the public。 After many years of development, the companies may have a good reputation among the public， so, some investors want to invest their money to those highreturn enterprises. In fact， issue bonds and debt are the best way to raise finance at the mature stage of the company because it can raise a large sum of the money one time. 5。 Conclusions This paper has analyzed some difficulties of raising finance for SMEs in UK, such as lack of financing instruction。 Also， size of the companies and channels of finance are limited。 At the end of the paper， some suggestions also have been given。 For instance， SMEs should rely on seed capital and angel investors at the start-up stage. In the developing stage, companies can use mixed methods because the companies expand fast. When it comes to the mature stage of enterprises， the companies can issue bonds and stocks so they can collect a large sum of money。 However, an imitation of the research should be taken into account， this research mainly focus on some most common methods to raise finance and it is also easy for SMEs to follow， but may other type of methods have not been introduced in this paper. 6。 References1。 Angela R （2010） “SMES Sector Access to Finance： An Overview。 University of lasi Faculty of Economics and Business Administration2。 Bank of England （2004）. Finance for Small Firms An Eleventh Report, Bank of England: London.3。 Berger and Udell （2006） A more complete conceptual framework for SME finance。 Journal of Banking and Finance。 Vol 30 294529664。 Beck and Demirguc-Kunt （2006） Small and medium size enterprises: Access to finance as a growth constraint。 Journal of Banking and Finance, vol 30， 2931-2943。5. Brookfield. D （2001） Business Finance and the SME sector Online Availablefromhttp：/www。accaglobal。com/en/student/qualificationresources/accaqualification/acca-exams/f9exams/examsf93/business-finance。html6。 Cosh， A., Hughes, A。 and Wood， E. （1999）. Innovation in UK SMEs: Causes and Consequences for Firm Failure and Acquisition, in Z。J。 Acs and B。 Carlsson (eds。）, Entrepreneurship， Small and MediumSized Enterprises and the Macroeconomy， Cambridge, Cambridge University Press。7。 Fraser， S （2004） A Report on 2004 UK Survey of SME Finances， Finance for Small and Medium-Sized Enterprises， Warwick Business School: Warwick8。 Irwin and Scott （2010). Barriers faced by SMEs in raising bank finance。 International Journal of entrepreneurial behaviour and research， vol 16, 2452599。 International Finance Corporation. 2010. The SME Banking Knowledge Guide”。 2nd Edition。10. Laurinkeviit， A。 Stasikien, 。 （2011)， SMS for decision making of SMEs， Clean Technologies Environmental Policy， vol。 13, no. 6， pp。 797-807。11。 Small Business Investment Taskforce（2005）， A Mapping Study of Venture Captial Provision to SMEs in England, Sheffield， Oct,20067。 AppendicesSeed CapitalAngel Investor FundingBank loansLeasing and FactoringVenture CapitalPublic equity and DebtDifferent stagesStart-up stageDeveloping stageMature stageWays to raise financeThe chat shows ways to raise finance in different stage10