The number of companies that take a place in Turkey's economy comprise 98% of SMEs.Because of this building maybe not the profit and operating capital but a significiant portion of employment takes a place in SMEs.Because of this important cause,Turkey must keep SME alive.However,it is evident that SMEs in our country are within inevitable vicious cycle.

So far,both short-term working capital needs and financing of investment projects of business enterprises are paid by bank resources.As a result of maturity mismatch in the use of bank resources,the optimal loan type and interest rate changes that not followed properly,caused ending developing activities of business enterprises which went into a financial vicious circle and each one is actually a kind of ''national wealth''.

When the company decides to grow equity,first comes to mind is an alternative source of financing ''bank loans''.As a natural result of not having sufficient financial resourches,Turkish banking system uses the international syndicated loans to create self investment.These resources' prompt is a year an average,which's interest space is determined to global market conjunctor and our rating note that based on country risk.As a result of this,when SMEs' financing needs arise,when short-term loan as a business enterprise is requested,the spread of interest,real interest that is applied by our banks' with own costs sit in first place in a world average and flexibility of prompt cannot be applied.
In securities,almost on all the assets of companies,mortgage,assignment and every precaution has been taken.And that clears maneuverability of financial companies.

In the event of taking long-term investment decisions,compatible with the investment process,assurances of bank loans become difficult as a result of finding a reasonable interest rate and facing issues that is riveted about loans of business enterprices.In this case,the companies in their financing of long-term investment by bearing higher costs and by undertaking all risks of maturity mismatch they have to use short-term bank loans.
This situation causes business enterprices facing both shrink and vanish that want to grow more.

In global financial markets,effective and appropriate usage of alternative financing sources in our country's economy is about to being late.Our SMEs are unaware of these resourches and there are suspicions about those resources relating to told and perceived correct,also in our national financial market.

Alternative financing sources of our capital market's new-known power supply is no doubt '' venture-capital investment trusts-GSYO'' , that is in the opinion of both public institutions and private sector organizations.Business enterprices' rescue ability from this vicious cycle that they fall in is possible by making aware them of this alternative financing chances.

Venture Capital Investment Partnerships

GSYOs are a legal entity and they are mentioned as companies of international arena '' private equity - (PE) '' .In our country,issued by the Capital Markets Board-CMB series :VI,No: 15 numbered Communiqué they are organized.GSYOs according to SPK's descriptions:

'' ... They are partnerships that direct their issued shared capitals to venture capital investments and founded as registered capital. GSYO is one of the tools that used to perform of venture capital investments.As a result,venture capital investment is an investment of decision and people or any company can make this.The GSYO is also an institutional investor and an agency of a capital market.Therefore GSYOs are needed to ensure compliance to the capital markets' legislation... ''

Again in the same source,as for venture companies:

'' ... According to the capital market regulations,established in Turkey or something to be established expresses the companies that bear potential of development and need resources.Venture companies have to aim creating or developing tools,equipment,materials,services or new products,methods,systems and manufacturing techniques that have industrial,agricultural applications and commercial market potential or have to be in this situation that accomplishing goals with management,technical and capital support... ''

PE companies or venture companies get into relationship of partnership with companies,not credit relationship.This has significiant benefits in terms of the business enterprices.These are:

I. Provides new capital inflows to company

II. With professional management,SMEs institutionalization have been obtained that are generally family business.

III. Especially international PE companies can offer their latest innovations to the company they invest in and may require its implementation.

IV. Lets new international markets' company of sales and service in hinterland and provides new marketing and sale strategies' development.

The main purpose of the PE companies ; in a short time (3-5 years on average) by investing in companies with the method of capital partnership,taking the company's current value up and providing the maximum benefit from stock investment they have done.After their investing time,PE company's exit from the company:

a) IPO

b) Sale of shares to another PE company

c) Transfer of priced shares to the other partners of the company

d) The sale of shares to another company

is in the form.

PE companies have some of the basic problems during their investing in our country.The most basic ones :

1. Problem of the scale ;they buy shares of the companies.But their size of capital and business volume remains small.While the cost that done for PE companies,small and large capital companies ( analyses before the purchase,establishment of professional management system after purchase etc. ) is same,capital of the small company's profit that he will make shares on the basis of and earnings from the large company with judge is not often the same. ( except for the technology companies and the companies that seeking international partnerships for investing new technologies they find. ) Problem of the scale may be valid for the company's importance and also valid for the project's importance.

2. In the case of not having professional documents that introduce companies' own structures or requiring this document's preparations,the reports appear that are not very significiant financially,consist of plain texts and not reveal clearly the company's financial status.Business plan,teaser,the current financial analysis reports,annual reports , etc and any information will be encouraging and supportive about why the PE companies need to invest in this company.

3.Although the company is very advantageous about the activity and about the market they involved in,having been entered into financial debt is a problem.PE companies' cost of investment destroys the profit ,that is planned to be obtained,by raising this mass of financial debt to high. ( within the requested tim time )

4. Company owners of our country are lack of information about PE companies and due to this,they have a proclivity about '' completely'' selling out or '' having too small share ''.That causes inefficient hand-changing to our companies in both sides.It shouldn't be forget that PE company is a financial company and they never know about the companies that they purchase their shares and never know about their sectors as well as the people who established and developed it.Therefore,owners of companies should sit down with the awareness of these important advantages and have to be in awareness that they obtained an alternative financing source for making their company large,not getting rid of it.

5. The fourth article's states of opposite are also mentioned.When ''buyers come out '',company owners request a high value for shares of the company without any financial reason and in outset,this makes all possibilities invalid.

6. In the case of purchasing shares of the company, finding '' professionals '' who can realize institutionalization and employed to show stability for a period is one of the most basic problems that PE companies are facing.

We can make a situation assessment for the national PE companies by looking at that issue from another point of view.PE companies,that are active in national markets, may be subjected to discrimination in themselves such as the following:

• PE companies that were established in abroad but also active in Turkey

• GSYOs that were founded in the country and registered to CMB

PE companies that were established in two different places but active in Turkey,whichever was established in abroad has no tax liability because of being a ''liason office'' but the PE company that was established in Turkey and registered to CMB has all kinds of tax liability and audit obligation.

Venture capital companies that were established in Turkey and because of this,their movement of capital and activites can be followed.They established in abroad but about the costs in the use of capital and business enterprice,they can not compete with the PE companies that have activities with '' laison office '' skills.This situation raises their perception of '' risk '' level higher that is in their establishment aim and prevents our national SMEs from obtaining financing.

This situation creates difficulties to the local venture capital companies that have ability in the future being new and successfull in international area.Harms increasing their effectiveness and ultimately prevents our SMEs' from taking advantages of financing opportunities.

The direction of Global Capital Flow and Turkey's position , Advantages ;

As a result of changing marketing conditions and '' global economic crisis'' that is tried to be get over,the direction of global capital has been turned towards '' developing economies '' .The only investment alternative in this countries is ''stressed asset '' that is SME investments of shares. ( over the counter -from the related market or directly ).
All kinds of money and capital market instruments are lack of profitability attraction.Because can be investment alternative in economic conjuncture but changed with crisis effect.
Today Turkey attracks attention in this global economic conjuncture with the basic elements.This elements :

• Advantage of the population; Turkey's average age is 28 and it is the youngest country of Europe's. Through these young people,it is more simple and advantageous to supply university graduates, trained manpower and reasonable cost obtaining when it is compared to the places in the world.
• Viability of the market consumes the young population.Having not been damaged family structure,Turkey with its traditions and lifestyle doesn't come immediately from its consumer position even that is an unemployed considerable person.
• The convenience that location brings ( feature of logistic hub ); Turkey acts as a bridge and this bridge with its position is not only an indispensable corridor of property but also a corridor of an energy,power of human and capital.
• Being an important stop of energy corridor and crossing main line stations and these are supported by international projects and agreements.
• The presence of renewable energy sources ( hydro,solar and wind ) and being owner of groundwater sources ( geothermal resources,minerals etc. )

Economic situations and the socio-economic consequences;ABD shows our visible changing in Europe countries and Asia each passing day.Anticipatory:

- Advanced economies
- Developing economies

concepts began to be meaningless today.Making an assessment with budget surpluses and negatives,definition above becomes totally meaningless.Valid definition of today's or the groups of countries:

• The countries with budget surpluses or in other words the countries that have state investment.
• The countries with budget deficit

Sovereign Wealth Fund ( SWF ) gives a way to international investments.SWF came to the fore with their big investments to the
large financial institutions like Citigroup,Merrill Lynch,UBS,Morgan Stanley and Bear Stearns
that falling to the difficult situation with the impact of financial crisis starting in 2007.
In principle,these funds are the funds of the countries that have
Asia's highest trade surplus and rich countries of petro-dollar.This can be defined as '' with the aim of evaulating the state's national savings.And its the investment vehicle that is managed by keeping
seperate from other assets belonging to the state. ''

State investment funds,often invest in SMEs that place in the popular sectors. ( for today,these sectors are energy,mining,agriculture,IT,retail and food sectors. )

Because Turkey is in a second group or being in the category of budget deficits countries,depending on this new economic developments and understanding of investment,all of these have effects on the investors that coming to our country.These are:

I. Their investment is moving from sectoral to the position of financial partners. ( e.g changing hands of
shares in the banks)
II. The countries that come for invest in,has a segmentational changes.
III. Duration of investment
IV. The selections of investment on the transfer of profit.
V. Differentiation in selected industries
VI. Profile changes in the economies of the scale

What should be Turkey's need to do and what should be the target of Turkey?

Turkey have to call an investment's and investor's attention.Therefore,have to determine accurately the capital flows and directions.The old molds are now broken.Many things that was significinat yesterday,became meaningless today.When looking at the map of global capital ownership,directions are shown automatically.

As a country;we should be aware of what we have.We should put forth our advantages and disadvantages without emotion but being concrete and objective and we must act with this awareness.We should know that our economic strength comes from dynamism of small and medium-sized companies.Today the power that attracks the PE companies is this dynamism.If we know the pros and cons actually and if we know making realistic situation analysis and act according to these,there is no obstacle in front of our new capital flow SME's that becoming the most important driving force and source of international scale raising.SME's vicious cycle has to be broken and they need to be aware of this global capital flows.We have to institutionalize our SMEs with foreign capital and with international partners,we should establish our global international companies,that turned towards new markets.The problem of unemployment's basic and fundamental solution is '' our strong national SMEs '' and this should be made a policy.

With its situation,dynamism,population,resourches it has and with liberal economy,our country will be frequented location of global capital even if we don't do anything new.We should aim to provide maximum benefit and advantageous opportunities to our SMEs' benefit.Without not going into financial debt,not degenerating
all of the loan and other financial instruments,we should provide the benefits by making maximum.
I claim that ; in prior there was a problem of finding financing for projects but now in Turkey there is no problem of finding financing for good firms and projects.Anyway,these should be known by their owners and should be submitted to financial realities appropriately.