ABSTRACT
Ownership structure of the capital is the value composition and proportion of different ownership capital relations. According to the pecking order
1 INTRODUCTION
With the large-scale promotion of new urbanization strategy, small and medium-sized enterprises (SEMs) will play an irreplaceable role in promoting regional economic development, maintaining market competition, and ensuring full employment. But for a long time, difficulties in financing and unreasonable capital arrangement have become the main factors restricting the development of SMEs. The defects in the present capital structure of SMEs in China is mainly reflected in the capital shortage, imbalance between internal and external financing. One the one hand, a heavy dependence on the internal financing is restricted by the scale of financing, which led to the total shortage of capital; on the other hand, exogenous financing channel is so narrow that the enterprise mainly relies on short-term loans from banks, resulting in the unreasonable ownership capital structure and maturity capital structure. Therefore, the most urgent problems for the medium and small enterprises are to optimize the capital structure, as well as broaden the financing channels. This paper will explore the methods to optimize the capital structure of small and mediumsized enterprises from both macro and micro dimensions, hoping to promote the sustained and healthy development of small and medium enterprises.
