An empirical evidence of small business financing in China

The purpose of this paper is to provide empirical quantitative evidence concerning small business financing in China and highlight the financing problems faced by small to medium‐sized enterprises (SMEs) in developing their businesses.

A semi‐structured questionnaire survey was conducted to collect data from a sample of 60 small businesses in three cities in China. Descriptive methods and the SPSS statistical software package were used to analyse the data and interpret the results.

The data gathered covered current topic in research including the capital structure of SMEs at start‐up, the types and extent of funding shortage, the preference of financial resources as SMEs grow, the significant factors, which help SMEs secure bank loans and the influence of a firm's size, age and the like. The findings generally support financial theories and previous studies about SMEs but also offer the basis for new arguments about financing SMEs in China.

The sample size is relatively small and statistical analysis is relatively straightforward.

The present study will be of interest to policy makers developing new strategies and policies to support the financing of SMEs in China.

The results from this study contribute to the understanding of current problems in financing Chinese small business enterprises. These include findings, which were not presented in other similar studies.