Factoring: An Effective Financing Option to SMEs in China

摘要

Factoring is a growing option of external financing for small and medium-size enterprises (SMEs) in China since its entry into WTO in 2001. The reason why there is considerable potential for factoring in China underlies three aspects: large funding gaps and serious difficulties in getting financial supports by SMEs, dramatic trade growth, and tremendous increase of factoring business itself in China as well as around the world. Data analysis also shows there is a good chance for factoring's further growth in China. Therefore, some recommendations are put forward to advance factoring in Chinese market in this paper, such as strengthening credit information infrastructure, enhancing legal and judicial system and training professional personnel.