With the development of modern theories of financial intermediation,there has been a breakthrough made in the study of bank loans to SMEs(small and medium enterprises).Foreign scholars have discussed the mode of bank operation based on asymmetric information,proving that banks have an advantage in information production,and bank loans can meet the funding demands of SMEs.Early literature has provided evidence of small bank advantage on the basis of relationship lending technology,while recent research shows that large banks can also tackle the issue of asymmetric information with transactional lending technology.The impact of market competition on lending technologies depends on the size of a bank as well as its organizational structure.However,conclusion has not been reached as to how competition affects the credit availability of SMEs.Though legal institutions obviously affect SMEs's funding,cross-country studies show that banks in both developed and developing countries are actively finding ways to solve SMEs' financing problems.More fruitful research can be expected in areas such as the combination of bank lending technologies,the impact of market competition and the bank loans to SMEs in transitional economies.