Reading and Reflection: The financing challenges facing specialized and innovative industrial enterprises cannot be resolved through simple policy escalation or an accumulation of instruments. Instead, they require structural reform and systematic reconstruction of the financial supply system.
The future direction should be to build a financial service ecosystem with complementary functions, shared risks, and compatible incentives, organized around the full life-cycle growth patterns of specialized and innovative enterprises.
Niu Xinyi, Dang Xueting, School of Economics and Management, Qinghai Minzu University
By the close of 2025, the number of specialized and innovative small and medium-sized entities recognized at the provincial level nationwide had exceeded 120,000, with approximately 15,000 national-level "little giants," making them important carriers of the innovation-driven strategy. Yet a paradox worth examining persists: cumulative fiscal awards and subsidies have surpassed 10 billion yuan, special loans have grown rapidly, and capital markets have opened green channels, but a large number of unlisted "little giants" still face real constraints such as difficulty obtaining financing, high financing costs, and slow financing processes.
By the close of 2024, unlisted "little giants" obtained approximately 54.24 billion yuan through capital markets, which remains a low capital penetration rate relative to their enormous base. This paradox indicates that the funding difficulties of such enterprises are not simply a matter of "insufficient total supply," but rather deep-seated structural contradictions between their asset endowments and innovation models on one hand, and traditional financial institutional logic and risk preferences on the other.
Existing research mostly approaches the issue from a single instrument or a single department—such as intellectual property pledges or government guarantees—and rarely places enterprise micro-characteristics, financial intermediary behavior, and macro policy systems into a unified framework for systematic deconstruction. What are the structural roots of the financing difficulties facing specialized and innovative industrial enterprises? Why do the diverse policies aimed at providing relief produce "synthesis errors" and "coordination gaps"? And how should a systematically consistent, incentive-compatible support ecosystem be constructed?
The financing challenges facing specialized and innovative industrial enterprises cannot be resolved through simple policy escalation or an accumulation of instruments. Instead, they require structural reform and systematic reconstruction of the financial supply system. The future direction should be to build a financial service ecosystem with complementary functions, shared risks, and compatible incentives, organized around the full life-cycle growth patterns of specialized and innovative enterprises.
The Logic Behind Structural Mismatch
The typical characteristics of specialized and innovative enterprises—deep cultivation in niche segments, high research and development investment, and light fixed assets—make their asset structures fundamentally different from the heavy-asset models of the traditional industrial era. Between this "new asset structure" and the bank-dominated indirect financing system, there exist deep contradictions rooted in financial contract theory.
Contract Governance Failure
Whether a commercial bank credit contract can be smoothly performed depends on whether collateral is observable, verifiable, and legally disposable. Tangible assets typically meet these conditions and therefore easily fit into standard credit arrangements. However, the key assets of specialized and innovative companies are mostly composed of intangible elements such as patents, technical know-how, and research team capabilities. Such assets have strong specificity, and their valuation depends on subsequent technological evolution and commercial conversion, making it difficult for third parties to make fair judgments at the time of contracting. Even when both banks and enterprises have the willingness to cooperate, contracts still struggle to clearly stipulate the income attribution, default handling, and value realization of these assets, resulting in a large number of incomplete contracts.
Furthermore, contract incompleteness raises transaction costs between banks and enterprises. Banks find it difficult to include intangible elements such as patents as qualified collateral, and traditional risk control frameworks consequently fail. Frontline institutions often choose to "lend cautiously" to avoid risks. At the same time, supporting systems for domestic intellectual property valuation, technology property rights transfer, and judicial liquidation of technology-related assets remain immature. If a borrower defaults, banks find it difficult to recover value through market-based channels, and potential loss exposure therefore expands. It is evident that the identification challenge for specialized and innovative entities is no longer simply a problem of information disadvantage, but rather a contractibility dilemma between intangible elements and standardized financial contracts, which constitutes the fundamental crux of their difficulty in obtaining traditional credit support.
Deepening Maturity Mismatch
Innovation activities typically involve repeated experimentation and gradual improvement. From basic research through pilot testing to large-scale commercialization, the complete chain often requires 3 to 7 years, and the commercialization cycle for cutting-edge tracks can be even longer. Therefore, this process depends on long-term, stable capital injection that can tolerate short-term periods without returns. China's financing structure has long relied on indirect financing, and commercial banks are constrained by liquidity requirements, capital adequacy requirements, and credit performance evaluations, naturally tilting their business focus toward short-term working capital loans. Medium- and long-term financing is often tied to physical investments such as equipment and plants, making it difficult to match the funding needs of purely research-oriented projects.
As a result, the short-termization of funding supply forces many specialized and innovative entities to adopt a "short-term borrowing for long-term use" strategy. This strategy not only brings financial burdens and liquidity pressures from loan renewals and bridge financing, but also prompts companies to cut back on cutting-edge research spending that has slow payback and shows no short-term results in order to stabilize immediate cash flow, causing innovation activities to become short-sighted. Over time, the iterative capacity of core technologies is weakened, and enterprises fall into a closed-loop predicament of "financing constraints—R&D cutbacks—weakened competitiveness."
Conflict in Return Structures
According to agency theory and option analysis frameworks, corporate innovation activities resemble a call option. Continuous early-stage research and development expenditure is equivalent to a limited premium. If technology is converted and commercial success is achieved, returns may reach several times or even dozens of times the investment; if research fails, all prior investment is sunk. This return distribution pattern indicates that only instruments capable of sharing excess returns—such as equity arrangements and profit-sharing mechanisms—can more easily achieve incentive compatibility with innovation activities.
The return mechanism of bank debt contracts is entirely different. Their returns are limited to agreed interest, but they must bear principal losses alone, creating a severe asymmetry between risk and return. Following commercial operating principles, banks will either raise risk premiums for higher-risk innovation projects or exclude them from credit coverage. If administrative requirements alone are used to push commercial banks to increase credit supply to specialized and innovative entities, it will be difficult to change the profit logic of micro-level actors. Not only is it hard to establish a long-term mechanism, but it may also trigger new problems such as weakened bank internal controls and accumulated hidden risks.
Coordination Failure and Its Deep Roots
Regarding the financing difficulties of specialized and innovative operating entities, China has gradually formed a set of policy instruments including fiscal subsidies, targeted loans, credit guarantees, and tiered equity markets. However, these instruments are controlled by different administrative authorities, and their operating mechanisms and target orientations are not consistent. Combined with shortcomings in auxiliary markets and institutional infrastructure, the entire support framework presents a fragmented character, with diminishing coordination effects, ultimately falling into a state of coordination failure.
Differences in Departmental Objective Functions Lead to Policy Transmission Obstacles
Currently, the institutions participating in supporting specialized and innovative entities can be broadly categorized into two types. Industrial administrative agencies such as industry and information technology departments and fiscal departments mainly pursue incubating high-quality operating entities, stimulating technological innovation, and improving industrial connectivity. Their commonly used tools include fiscal subsidies, public procurement, and industrial guidance funds, with functions oriented toward absorbing front-end innovation uncertainty and sending industrial direction signals. Monetary authorities and financial regulatory agencies must uphold the bottom line of systemic risk, mainly through relending tools, differentiated regulatory assessments, and loan direction guidance, requiring relevant businesses to have commercial viability.
The objective functions of these two types of institutions are not consistent, which to a considerable extent causes breaks in policy transmission at the末端. Signals such as fiscal appropriations and qualification grants are difficult to convert into credit enhancement variables that bank risk control systems can measure and trust. If banks cannot judge the true risk of enterprises based on the fiscal support or innovation qualifications they receive, policy guidance will find it difficult to leverage follow-on loan resources. Various instruments each go their own way, and originally complementary support arrangements degenerate into policy isolation zones, producing synthesis-error-type outcomes with significantly diminished overall effectiveness.
Shortage of Risk-Sharing Public Goods Supply and Weak Buffer Mechanisms
Specialized and innovative entities often simultaneously bear triple pressures of technological uncertainty, market volatility, and research failure. It is very difficult to effectively diversify risks with only banks and enterprises as two parties. A professional risk-sharing market has quasi-public goods attributes and requires public sector guidance and cultivation. However, the development of related fields in China remains sluggish, becoming a prominent shortcoming in the operation of the financing framework.
First, the matching degree of the policy-based credit guarantee framework is relatively low. Existing guarantee organizations mostly adopt universal risk control standards and general business models, without designing differentiated loss compensation methods and performance evaluations for high-frequency, high-risk businesses such as pledge financing of intangible property rights like patents and first-time pure credit loans. Some institutions avoid high-risk businesses due to risk aversion, resulting in a phenomenon of underwriting without assuming responsibility. Others, due to softened risk constraints, tacitly allow excessive risk-taking by both banks and enterprises, triggering moral hazard.
Second, risk diversification markets such as technology insurance products and patent property rights circulation are developing slowly. Insurance products suitable for situations such as research suspension, patent infringement, and first-unit equipment use are limited in variety and coverage. In addition, patent property rights trading rules are not yet sound, trading activity is insufficient, and channels for risk transfer and value realization of intangible elements are blocked. Overall, a full-chain risk-sharing system has not yet taken shape, and various types of risk ultimately accumulate excessively at the end of banks and guarantee organizations, continuously suppressing financial institutions' willingness to serve.
Lagging Construction of Digital Credit Infrastructure and Data Obstruction Limiting Risk Control Paradigm Transformation
To resolve the difficulty of evaluating unstructured information of specialized and innovative entities, the key depends on fintech tools such as massive data and intelligent algorithms to integrate multi-dimensional operating information and form dynamic credit profiles. However, there is currently obvious fragmentation between government data and commercial data. Core information such as enterprise tax payments, social insurance participation, patents, regulatory records, and supply chain orders is scattered across different government departments and platform companies. Constrained by administrative systems, data rights confirmation, and privacy protection, sharing mechanisms are absent, forming large-scale data islands.
Frontline financial institutions find it difficult to gather multi-source information at low cost and high efficiency, and can only continue to rely on traditional financial statements and physical assets for static risk judgments, unable to establish risk control frameworks adapted to technology companies' technology information flows and data information flows. Data obstruction directly causes financial institutions to find it difficult to evaluate and dare not lend to specialized and innovative entities. The lack of underlying data support for the transformation of financial service models is also a fundamental reason that has long plagued the financing of asset-light technology companies.
Systematic Reconstruction Logic and Optimization Pathways
To break the financing predicament of specialized and innovative enterprise entities, systematic reshaping must be advanced. The goal is to form a financial support ecosystem architecture featuring administrative guidance, market operation, risk sharing, and data connectivity. This system takes the full life-stage needs of enterprises as its main thread, enabling fiscal, loan, equity, guarantee, and insurance instruments to achieve organic coordination and risk continuity.
Fiscal Positioning: From Subsidy Provider to Risk Anchor and Market Cultivator
Fiscal funds are not intended to replace market resource allocation, but rather to undertake front-end high-risk segments that market capital is unwilling to enter, while leveraging social capital in a market-oriented manner and opening channels between policy and finance. For enterprises at different life stages, the use of fiscal instruments should be optimized in layers.
For seed-stage and start-up-stage enterprises, the focus should be on early-stage equity investment through fund-of-funds and sub-fund models. Central and provincial specialized and innovative industrial guidance mother funds should be established to guide commercial venture capital funds to focus on cutting-edge technology fields through equity participation, filling the equity capital gap at the initial stage. For expansion-stage enterprises, fiscal reward methods should be optimized, deeply binding reward funds and qualification grants with measurable indicators such as R&D expenditure ratios, patent output, and industrial chain collaboration contributions, so that enterprises obtaining policy support qualifications becomes a credible signal for financial institutions to identify technological strength and growth potential, achieving the transformation of policy signals into financial credit enhancement variables. For high-risk credit businesses such as pledges of intangible property rights like patents and first-time loans, the intensity of loss compensation for policy-based credit guarantee organizations should be increased, risk compensation ratios should be raised, and the fiscal risk backstop function should be substantively implemented to loosen constraints on lending operations.
Credit Transformation: From Fund Provider to Value Identifier
Commercial banks are the core entities of the indirect financing system and must thoroughly abandon risk control concepts that rely heavily on collateral and physical assets, reshaping credit review, product development, and internal evaluation systems around the characteristics of specialized and innovative entities.
First, promote the standardization and scoring of unstructured information. Jointly with patent valuation agencies, core supply chain manufacturers, and research institutions, establish exclusive technology evaluation frameworks that convert unstructured information such as patent scale, patent quality, R&D personnel stability, technical barriers, and supply chain position into measurable scoring indicators incorporated into credit scoring models, achieving effective identification of intangible element value. Second, deepen supply chain financing and transaction data risk control. Relying on distributed ledgers and sensor networks, carry out supply chain financing around key supply chains, using dynamic transaction data such as actual orders, receivables, and inventory certificates as new credit support to reduce reliance on physical collateral. Finally, innovate composite financial products and build return-sharing arrangements. Comprehensively promote models such as equity-loan linkage, credit with attached warrants, and forward revenue sharing, allowing banks to have the opportunity to share in excess returns brought by enterprise technological breakthroughs and scale expansion while bearing loan risks, repairing the risk-return imbalance. At the same time, support internal bank evaluation reform, moderately relax short-term non-performing loan ratio assessments for technology loans, and establish a trial-and-error tolerance mechanism.
Equity Market: From Board Listing to Functionally Complementary Growth Ladder
The multi-tiered equity financing market is the core vehicle for providing long-duration equity funds that match the long-cycle needs of innovation. It is necessary to break through the problems of overlapping functions among boards and poor transfer channels, forming a stepped service system with clear division of labor and organic connectivity.
Regional equity markets and the NEEQ specialized and innovative board should be positioned as the basic platform for corporate governance standardization and value discovery, focusing on basic services such as equity registration, compliance construction, value assessment, and financing roadshows, creating a project database for venture capital institutions and early-stage equity exit channels. The Beijing Stock Exchange should focus on innovative small and medium-sized companies, further optimize listing thresholds, enhance inclusiveness for small and medium-sized hard-tech companies, and become the main direct financing platform for specialized and innovative entities in their growth stage. The STAR Market and ChiNext should target high-quality enterprises that have completed technology verification and entered a high-speed expansion stage, playing the role of capital boosters to help enterprises become bigger and stronger. On this basis, comprehensively smooth cross-market transfer arrangements, open up the complete capital chain from front-end incubation to mid-term financing to scale expansion, replace short-term debt with long-term equity funds, and fundamentally resolve the maturity mismatch problem.
Risk Sharing: Building a Tiered Risk Fund Pool Involving Government, Banks, Insurance, and Guarantees
Based on differences in risk attributes, a two-tier risk-sharing architecture should be built with policy-based bottom-layer backstopping and market-based upper-layer diversification, achieving layered risk guidance and multi-party sharing.
The bottom layer is a policy-based risk compensation pool. Central and local fiscal authorities should jointly contribute to establish a specialized and innovative entity financing loss compensation fund pool, sharing loan principal losses with banks and guarantee organizations according to agreed ratios for businesses such as patent pledge loans, pure credit loans, and first-time loans, absorbing tail extreme risks. The upper layer relies on market-based instruments to diversify routine risks. Increase support for technology insurance, guiding enterprises through premium subsidies to purchase exclusive insurance types such as research suspension insurance, patent infringement liability insurance, and first-unit equipment insurance, using the law of large numbers to resolve technological and market risks. Steadily advance pilot programs for patent asset securitization, packaging dispersed intangible assets into asset-backed securities for issuance, achieving market-based risk transfer and capital recovery. At the same time, improve governance standards for guarantee organizations, refine risk control standards and reward-punishment mechanisms for different businesses, suppress adverse selection and curb moral hazard, ensuring the sustainable operation of the risk-sharing system.
Coordinating Digital Credit Infrastructure Construction: Breaking Data Obstructions and Achieving Information Connectivity
Advance cross-departmental data interoperability platforms as foundational projects, led by local governments, integrating multi-dimensional data such as tax payments, market supervision, patents, social insurance participation, judicial records, and supply chain transactions to build a unified digital credit system for specialized and innovative entities. Under the premise of strictly safeguarding data security, privacy protection, and compliance boundaries, open query portals in an orderly manner to financial institutions, guarantee organizations, and venture capital institutions, supporting financial institutions in building multi-dimensional, dynamic enterprise credit profiles. Relying on data empowerment, promote financial services to shift from post-event static risk management to full-process dynamic risk management featuring pre-event prediction and in-process monitoring, solidifying the data foundation for the operation of the entire financing ecosystem.
The financing challenges facing specialized and innovative industrial enterprises are a concentrated manifestation of the mismatch between the traditional financial system and new technology industry paradigms in China's economic transition from factor-driven to innovation-driven. The root cause lies in deep-seated structural and contractual mismatches between enterprises' "asset-light, high-innovation" asset characteristics and financial contracts based on collateral and risk aversion. Existing diverse support policies, due to departmental coordination obstacles, missing risk-sharing public goods, and lagging digital credit infrastructure, have fallen into "coordination failure" and have not effectively resolved this fundamental contradiction.
Therefore, the solution is by no means simple policy escalation or instrument accumulation, but rather structural reform and systematic reconstruction of the financial supply system. The future direction is to build a financial service ecosystem with complementary functions, shared risks, and compatible incentives, organized around the full life-cycle growth patterns of specialized and innovative enterprises. In this system, fiscal funds play the role of "risk anchor" and market initiator, the banking system completes its paradigm transformation from "collateral culture" to "technology-flow credit," the multi-tiered capital market forms a solid growth ladder, and the "government-bank-insurance-guarantee" tiered risk pool provides stable buffering for the entire system. Only through such systematic reconstruction can the allocation logic of financial resources truly return to serving the essence of real-economy innovation activities, completing the modernization transformation of China's financial system itself in the historical process of supporting technological self-reliance and high-quality manufacturing development.
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