- The root of financing difficulty lies in credit stratification and collateral dependence
- Maturity mismatch starves long-cycle projects of funding
- Solutions: information-based credit enhancement, patient capital, supply chain penetration
1. Financing Difficulty Is Not About Volume, but Structure
When discussing financing for private enterprises, it is easy to fall into a misconception: reducing the problem to "banks are unwilling to lend" or "policies are not loose enough." Yet in recent years, from relending facilities for small businesses to inclusive finance support tools, monetary and regulatory policies have kept expanding. The total amount of credit available to private firms is not low. What truly holds them back is a structural mismatch: money flows to those who do not need it, while those who do cannot access the right kind of money.
This structural problem has at least three layers. The first is credit stratification. In bank risk models, state-owned enterprises and large private firms, listed private firms and small and medium private companies, and firms with collateral versus those without naturally sit in different credit tiers. Small and medium private enterprises often lack historical credit records and verifiable operating data, making it hard for risk models to score them well. The second is collateral dependence. Despite the promotion of intellectual property pledges and receivables financing, in day-to-day lending practice, real estate and land remain the primary means of credit enhancement. Asset-light technology and service firms are precisely the ones that lack these. The third is maturity mismatch. Manufacturing upgrades, R&D investment, and brand building often take three to five years or more to pay off, while bank working capital loans are mostly one-year terms. Firms are forced to "borrow short to fund long," and any hiccup in renewal can tighten the cash flow noose immediately.
2. What Institutional Supply Is Fixing After the Private Economy Promotion Law Takes Effect
On May 20, 2025, the Private Economy Promotion Law officially took effect. Its significance does not lie in directly handing out money, but in addressing these structural issues at the institutional level. It explicitly guarantees that private economic organizations can participate fairly in market competition, and sets rules on access to factors of production, public services, and legal protection. It also imposes constraints on pain points such as delayed payments and unreasonable fees. In the financing domain, the law emphasizes that financial institutions should treat all ownership types equally and improve the credit information service system, providing a legal basis for "information replacing collateral."
Meanwhile, local policy tools are also evolving. In Shanghai's Lin-gang Special Area, for example, local authorities have explored models such as "turning fiscal grants into equity investment," shifting fiscal support from subsidies to equity investment, using patient capital to match the long cycles of hard technology. The value of such exploration is that it no longer requires firms to prove short-term repayment ability, but instead shares risks and growth through equity. For early-stage tech private firms, this is more satisfying than a one-year loan.
But for institutional supply to translate into tangible capacity for enterprises, intermediate links must cooperate. If bank assessments still center on collateral ratios, legal principles will be hard to implement. If government financing guarantees lack capital or have slow compensation processes, their credit enhancement function will be discounted. If credit information platforms remain fragmented, risk models still cannot see the true operating conditions of private firms.
3. Practical Solutions: From "Asking for Loans" to "Managing Credit"
For private enterprises, waiting for the external environment to fully improve is unrealistic. A more viable strategy is to actively manage their own "credit assets." There are three paths.
- Replace collateral with information. Standardized financials, tax compliance, continuous social security contributions, and stable utility and logistics data—these seemingly trivial records are becoming key inputs for bank risk models. The earlier a firm makes its operating data "online and verifiable," the easier it is to enter the whitelist for credit loans.
- Use supply chains to penetrate credit barriers. Core enterprises' accounts payable, orders, and warehouse receipts can become financing instruments for smaller suppliers. Joining a mature supply chain finance system and leveraging the credit spillover of core enterprises is more efficient than proving one's strength to a bank alone.
- Match long cycles with patient capital. R&D investment, equipment upgrades, and brand building should prioritize equity financing, government-guided funds, and industrial capital—long-term money—rather than short-term loans. Aligning the maturities of both sides of the balance sheet is the bottom line for financial soundness.
Conclusion: The essence of financing difficulty is insufficient credit pricing capability and capital maturity mismatch. Policies are dismantling institutional barriers, and enterprises must simultaneously upgrade their credit management capabilities. When a private firm can continuously produce verifiable operating data, plug into supply chain credit networks, and match long-term projects with long-term money, financing is no longer about asking for loans—it becomes the market's normal pricing of credit. This is perhaps the dividend private enterprises should seize most after the Private Economy Promotion Law takes effect.