Abstract: Aiming at the problem of funding shortages of the dealer, the financing strategy of closed-loop supply chain is studied. Firstly, the decision model of closed-loop supply chain is constructed without financing, and the influence of the remanufacturing capital level on the optimal strategy is discussed. Secondly, the bank loan financing strategy and the equity financing strategy are researched, and the selection boundary of the dealer’s financing strategy is explored. The research shows that when the initial fund is in short supply, the level of the initial capital and the ratio of equity dividend are the keys to the selection of financing methods. When two kinds of financing strategies bring the same benefits to the dealer, equity financing strategy makes the product price lower and total market sales higher, leading to the remanufacturing has better social benefits.

Key words: capital constraints, financing strategies, remanufacturing, closed-loop supply chain