Financing: Don'T Be Blinded By Beautiful Lies.

"A trading company in Beijing wants to raise 30 million yuan, which is charged by investors 350 thousand yuan in the name of cooperative credit, and has promised 15 working days to invest. However, two months later, the funds are still missing."

According to the statistics of the national development and Reform Commission, by the end of 2006, the number of small and medium-sized enterprises in China has reached about 42000000.

However, SMEs are suffering from lack of funds in the process of entrepreneurship development. Many enterprises have died due to the fragmentation of the capital chain, and more companies are struggling because of the lack of funds for further development.

The main reason for the lack of funds for SMEs is the lack of direct market financing channels.

According to relevant personages, there are several ways to finance SMEs: credit support, securities market, financing lease, fund support, private capital and international market development funds.

It is undeniable that through these financing channels, many small and medium-sized enterprises develop and grow, but there are many SMEs that need to expand their development through financing.

So how can SMEs avoid the risk of financing?

Recently, some professionals analyzed some of the problems, which provided some references for enterprises to avoid risks.

It is also the biggest problem to write a business plan in the project financing.

Many projects do not operate according to the normal rules of the game, so that many potential projects are passed by investors who are eager to see it.

Wu Tianping, President of Cci Capital Ltd in Shanghai, analyzed the problems brought about by the non-standard operation in the financing process.

According to Wu Tianping, in his work practice, there are many cases of missing good financing opportunities for good projects because of unqualified business plans. The main reason is that business leaders have misunderstandings about financing and venture capital, do not operate according to the normal rules of the game, and the pertinence of the business plan is not strong, which makes the attractiveness of the project greatly reduced.

The direct purpose of compiling business plans is to find strategic partners or venture capital funds. Financing does need to provide business plans for prospective investors to demonstrate.

However, there are many phenomena of fraudulent use of business plans in the name of investment companies and investment consortia in reality.

How can we prevent business plan fraud in project financing?

Wu Tianping, combined with his company's experience in financing for small and medium-sized enterprises over the past few years, analyzed two kinds of common business plan fraud, hoping to arouse the attention of small and medium-sized enterprises.

1, in the name of investors, it is required that tens of thousands of units need to be financed until hundreds of thousands of yuan, and the business plan is written by their designated organizations, and then the excuses are made to deny the investment and earn the compiling fee of the business plan.

For example, a company in Shenzhen, in the name of internationally renowned enterprises, has defrauded about 7000000 yuan of business plan compiling fees to more than 130 enterprises.

2, a business unit with a business plan is required to recompile the business plan with a high cost, and then make excuses to deny the investment and earn the compiling fee of the business plan.

For example, Kunming Jialong company has been engaged in the research of Eucalyptus cultivation and planting for many years, and has won the scientific and technological progress award of the government. Financing for industrialization needs 80 million yuan. Experts have written a business plan.

However, the representative of Beijing, a representative of the US investment company, required the company to make a business plan of 200 thousand yuan from its designated organization in the name of determining the investment.

Later, the head of Kunming JiaKong company found the ridge Sha, after detailed analysis by the experts, the head of Kunming JiaKong company really understood that investors wanted to see a well regulated business plan, rather than requiring the business plan to be compiled by any organization.

Actually, the business plan originally written by JiaKong company has already had a good foundation, and the company has been approved by the regular investors for a little modification.

The relevant experts also pointed out that enterprises should have corresponding contingency plans to guard against investment and financing risks, pay more attention to the start-up procedures, grasp the strategy of litigation or non litigation strategies, and take the initiative to solve the risks faced in the investment process, so that enterprises can cope well with the relevant legal risks and effectively solve the crises they face, so as to promote enterprises to develop sustainably, healthily and steadily.

A case study was conducted in a timely manner to avoid a financing scam. A trading company operating iron making iron and iron concentrate was financed by shortage of funds.

Since June last year, the company has not only failed to finance its success, but also spent about 200000 yuan. Almost all the Finance Companies it encountered were Swindlers Company.

In March of this year, the company signed a financing service contract with China's JR Limited by Share Ltd, and the other side asked the company to pay three hundred and fifty thousand yuan of contract performance.

The contract agreed to the completion of the contract for 15 working days from the date of 15 working days, but has not been in place in the past 3 months, the company in May 14th looking for the return of the performance of the company's request, JR company insisted that the fund is sure to be successful for a few days, the company let JR company refund, the JR company opened a refund check date written in May 26th, they said, "if the money before May 26th is not in place to deposit a check."

Later, the company found the Cci Capital Ltd in Shanghai, and consulted them.

Wu Tianping, President of Cci Capital Ltd in Shanghai, said that according to the international financing practices, the capital side should not charge any fees to the project side. As long as the capital side who charges any fee to the project side is not standardized, the fact is that the final is a hoax. The statement of China's JR Limited by Share Ltd is not credible, though it is a Chinese company from the name of JR company.

From its website, it is registered in Hongkong. It is very simple to register such a company overseas, but no case of successful investment has been found.

Judging from the situation of the company charging and not investing according to the agreed time, there is a great risk (because no concrete contract can be seen, and it can only be the next simple conclusion); the "refund check date written in May 26th is not in place to go to check cheque", which is not in line with the banking regulations; many similar financing institutions in Beijing and Shenzhen, they usually cheat for a period of time will disappear and take away the money.

Finally, the advice given by the company is to report the case to the police before finding the other company, recover 350 thousand yuan, reduce the loss, and cooperate with the capital side who has invested the strength and has invested in China.

Finally, according to the advice from Shanghai's Cci Capital Ltd, the company took back 300 thousand yuan.