SMEs´ financing decision: Based on the supply chain finance

This paper aims to find out the optimal financing decisions for SME enterprises by analyzing three solutions of financing models, where commercial bank loan and trade credit are effective financing ways for SME enterprises. The financing decisions are considered for the SME enterprise in the two-echelon supply chain environment where the SME enterprise is a retailer, and the manufacturer is a large-size core enterprise that can guarantee the loan for the retailer. A newsvendor model is built to analyze the financing decisions. The conclusions can provide references for small and medium enterprises with financial constraints, thus encouraging the core enterprise of the supply chain to share the risk of loans.