Lending to small and medium businesses: problems and solutions

Abstract

The development of small and medium businesses becomes one of the priorities on economic state policy in today's difficult economic situation. The need for effective use of the potential opportunities of small and medium business as the most widespread form of entrepreneurship, which provides socio-economic stability of development, the implementation of a diversification and an economic modernization, improving its efficiency, import substitution, the solution of complicated social problems is increasing. At the present time, conditions for the development of small business in Russia are deteriorating because of the action of a number of adverse factors. One of these adverse factors is lending to small and medium businesses. Financial position reflects the ability of the company to finance its current activity on an extended basis, always maintain their solvency and investment attractiveness. The company should have sufficient capital, optimal structure of assets and sources of its financing to do it. It is also important to use the funds in such way that the revenues consistently exceed expenses, it provides the stable solvency and the growth of profitability.