A Comparative Analysis of SME Financing Policies — a Taiwan Lease Financing Company as an Example

• Main Authors: Chang-Ming Yang, 楊彰銘
• Other Authors: Dr. David M. Chen
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/73294466822159903368

碩士 === 輔仁大學 === 金融研究所 === 98 === SMEs are the cornerstone of productivity in Taiwan, economic statistics shows that the number of SMEs accounted for about 97% to 98% of the total number of enterprises and employed around 77% to 80% of the working population for the last decade. Financing SMEs is always a tough challenging issue, in addition to investments and borrowings from relatives, friends and private mutual lending groups, bank loans and leases play a major role in sustaining the growth of SMEs. The financial crisis after the collapse of Lehman Brothers triggered a severe credit crunch, while banks were gearing up their capital to fulfill the Basel II requirement, bank loans became increasingly scarce. Though financial guarantees provided by the government sponsored SME Credit Guarantee Fund mitigate a large portion of credit risks, the guarantees have a preset upper limit, banks still have to observe the market conditions. This thesis examines the lending policies of a lease company to extract the distinctions from those of banks for the purpose of evaluating the relative advantages of lease financing as an alternative source to SMEs funding. Lease companies have accumulated knowledge and know-how in collecting secondary market information for collateral appraisal and disposal. They manage close relationships with, and sometimes even obtain counter guarantees from, equipment vendors. Hence, they can afford to provide financing for SMEs that clearly would be rejected by banks.