According to the provisions of People's Republic of China (PRC) Securities Investment Fund Law and People's Republic of China (PRC) Company Law, private equity financing refers to the financing behavior of raising funds through bidding and other means. Through private discussions with specific investors or debtors, rather than in public. The conditions for private financing are:

1. Enterprises that handle private equity financing for small and medium-sized enterprises shall meet the standards stipulated by the state policies on small and medium-sized enterprises.

2. There must be corporate tax regulations for private financing of SMEs.

3. The main business of the target enterprise applying for private equity financing of small and medium-sized enterprises cannot include real estate and financial business.

4. The annual operating income of the target enterprise handling private placement financing for small and medium-sized enterprises reaches a certain scale, and the annual turnover income of the enterprise is not less than the amount of bonds issued.

5. The target enterprise for private placement of small and medium-sized enterprises can obtain the guarantee of large state-owned enterprises or state-owned guarantee companies.

6. Enterprises applying for private financing of small and medium-sized enterprises whose credit rating reaches AA or above will be restricted from consideration.