Equity and retained earning embody correspondingly 30 percent and 26 percent of funds resources in SMEs in China. Along with external financing conduits, equity market’s entry threshold is far above the ground, venture capital deal scheme is yet to become inclusive, corporate bonds’ issuance opening is complicated; accordingly SMEs can’t move up capital in the course of capital market in actual fact. For case in point, listing in the stock market in Shenzhen or Shanghai is a benefit of a handful of deep-rooted, huge and gainful private SMEs. Even though the organization of the second board in relation to the Shenzhen market for state-of-the-art SMEs may well alleviate this requirement rather for such firms, for non-high-tech SMEs financing yet continues a foremost trouble. Furthermore, bond financing appears to be even less reachable for private SMEs because of stern criteria comprising industrial policy strategy (Lin and Sun, 2006). Funds required by SMEs has the traits of little amount, pressing and recurrent demands in short term. But the control cost of such financing is much high comparing the financing to large firms. The minor range of SME loans creates banks proportionately more costly to keep an eye on. Large banks have a preference to carry out deals with large firms. Nevertheless there are small and medium banks and financial organizations which have much a smaller amount capital and which provide finances to SMEs with a superior value.