2013 SME Financing Outlook

Recently, the "CEConline" website launched the "2013 SME Financing Survey". Thousands of SME managers participated in the vote. The results show that they are more optimistic about the outlook for financing in 2013 than we expected.

A total of 1,257 managers participated in the survey, of which about 60% were senior executives (chairmen, business owners, general managers, factory directors), more than half were from manufacturing or wholesale and retail industries, and 82% of respondents employed The number of people is less than 250, and nearly 60% of the enterprises are located in East and South China. Their answers to SME financing questions may provide lessons for more managers.

Financing environment improves, SMEs are cautiously optimistic about 2013

Although the respondents still believe that the government's financing support for SMEs is not enough, such as encouraging banks and other "mainstream" "Financial institutions' lending to SMEs is not as effective as expected, but one-quarter of respondents still expects "fairly good" or "very good" in financing conditions in the coming year (see Figure 1).

Specific analysis, one of the reasons may be - most SMEs that did not borrow excessively survived the complex economic environment of 2012. Therefore, when the most difficult period has passed, the confidence index of SME managers has also rebounded in the face of a gradually recovering economy.

The survey results in 2013 in terms of financing tenure and loan purpose show that the interviewed SME managers plan to greatly increase long-term borrowing (financing plans with a maturity of more than 1 year increased by 17% compared with 2012, reaching 47%) , 70% of the respondents will use the funds raised to expand their business scale or carry out industrial upgrading (see Figure 2).

It can be seen that although SMEs frequently Private lenders called for help, and by the beginning of 2013 they had largely managed to repay the loans they had taken out, turning to the long-term development of the business.

While more optimistic about the outlook, respondents remain cautious about acceptable financing rates (see Figure 3). In 2013, the number of respondents who refused to accept interest rates of 10% or higher rose sharply. This means that they will reject financing channels with relatively high interest rates, such as private financing. But it is unclear whether the outlook for corporate earnings is failing to support higher interest rates, or whether "mainstream" credit institutions are improving their cooperation with small and medium-sized companies, or whether a crackdown on illegal lending has made executives more cautious.

The Wenzhou credit crisis forced the acceleration of financial reform

and The manager's optimism corresponds to the acceleration of reforms in the financial sector by relevant government departments. In view of the chaotic growth of private finance in Wenzhou, Ordos and other places in 2011-2012, the regulatory authorities are determined to solve the dilemma that small and medium-sized enterprises cannot obtain financing from "mainstream" institutions such as banks and are forced to turn to underground financing.

As the government encourages financial institutions such as banks to lend to SMEs, and many financing intermediaries that have been in the grey area are cleaned up, two-thirds of those who voted now see banks as the main source of financing one.

But regardless of the healthy development of the financial industry or the rationality of corporate financing, the diversification of financing channels for SMEs is absolutely necessary.

In March last year, when the State Council officially announced the establishment of the "Wenzhou Financial Reform Pilot Zone" to standardize and legalize private lending, and explore the form of private capital entering the financial industry, Wenzhou, a city famous for its entrepreneurial spirit, has It was hit hard by the sharp shock of the private lending collapse.

According to Xinhuanet, between August 2011 and May 2012, when the credit crisis broke out in Wenzhou:

• Private lending shrank by 30%

• 800 financial intermediaries closed

• Courts Handling 22,000 private lending disputes

•Nearly 100 private enterprise managers in Wenzhou disappeared, committed suicide or declared bankruptcy, resulting in bad debts of 10 billion yuan.

As early as 2011, Caixin Media and other outspoken media commented that the market barriers that discriminate against Wenzhou's small and medium-sized enterprises and the long-term suppression of private financing have prevented smaller enterprises from obtaining sufficient capital to innovate— -The only option they have is "copycat", which ultimately leads them to lose their competitiveness in the traditionally dominant market of global consumer daily necessities. Not only in Wenzhou, but small and medium-sized enterprises across the country often suffer from financing difficulties. "Transformation and upgrading" can only be a slogan.

When the Wenzhou credit crisis began to emerge, a Caixin editorial also pointed out that a series of overall financial reforms were needed to solve the fundamental problems plaguing corporate financing. Analysts pointed out that the far-reaching impact of Zhejiang's financial shocks has made it far beyond the scope of "local" problems and has a global impact.

This statement was also endorsed by the SME managers who participated in the survey, with more than three-quarters agreeing with the statement that "the 2011 Wenzhou credit crisis was a representative case of financing difficulties for Chinese SMEs" (see Figure 4). ).

According to the financial reform plan announced by the Wenzhou Municipal Government, its The goal is to provide private funds to local businesses through formal institutions such as microfinance companies. Qualified credit companies will be transformed into village banks. According to domestic media reports, in the second and third quarters of 2012, a total of about 30 microfinance institutions have applied to the government for certification, with a total registered capital of 8 billion yuan.

However, our survey results show that small and medium-sized enterprises are largely not optimistic about the "Wenzhou Financial Reform". Only 18.6% of the respondents believed that "Wenzhou's problems can be solved and can be used as a reference for other regions" (see Figure 5).

In the spring breeze of policy, how can SMEs get financing in 2013?

The introduction of financial reform areas such as Wenzhou, Shenzhen Qianhai, and Tianjin Binhai New Area has driven financial reforms in various places. "Solving the financing difficulties of small and medium-sized enterprises" has become a slogan often used by regulatory authorities at all levels. So, behind the financial reform in full swing, are small and medium-sized enterprises feeling the long-lost warmth?

We first asked how SMEs in different regions depended on private financing channels (see Figure 6).

But about 48.2% of "private financing" Interviews with SMEs are not recognized. They say that “private financing channels will be considered as a last resort” (see Figure 7).

Although it is a "last resort", from the survey question "2012 What are the main financing channels in 2012?” It is obvious that a large number of respondents still obtained funds from various private financing channels in 2012, especially individuals, small loan institutions and enterprises.

Our data highlights why small businesses and business owners have to turn to private lenders for help: Difficulty getting bank loans - only 2.1% of SMEs "have no problems" when applying for loans from financial institutions such as banks ” (see Figure 8). The main reasons holding them back are "the inability to meet the collateral conditions required by the banks, the high total cost of obtaining a loan, the inability of financial products to meet their needs flexibly, and the long period of loan issuance."

Respondents pointed out that when they choose these "last resort" financing channels, they face Three major challenges: first, high interest rates; second, disputes are prone to occur; and third (this brings relatively little trouble), often only a part of the total required funds can be borrowed (see Figure 9).

How high the interest can be, how high the risk can be, these It mainly depends on the nature of the transaction itself. The identities of the parties to many "shadow banking" transactions are not illegal; such transactions fall into a gray area outside the jurisdiction of the law.

The most common of these is borrowing from natural persons, i.e. borrowing money from individuals. Mainly among acquaintances. If the interest rate does not exceed 4 times the official interest rate, it is a reasonable and legal loan. But in reality, interest rates are often very high, resulting in usury.

Micro-loan companies make loans through their own funds. As long as it is not 4 times the official rate, it is also legal. But again, its interest rates tend not to be low. The problem with such companies is their inability to absorb deposits, which limits their scale of development.

Intra-company financing is also a normal way, the increasingly popular employee stock ownership plan is a typical form. But if it is purely internal financing, it is suspected of illegal fundraising.

It is worth noting that these 3 financing methods - borrowing from natural persons, microfinance institutions and internal financing - were listed by respondents as the easiest channels to obtain funds, and were also the actual The most commonly used means of financing.

Where do SMEs get funding? 'Bank' is far ahead of the other options - two-thirds of respondents expect banks to be their main source of funding in 2013. The remaining 4 financing channels with a higher ratio than the same period last year are: New Third Board financing, credit guarantee institutions, introduction of private placement or venture capital, and issuance of private placement bonds for SMEs (see Figure 10).