Based on the data of listed small and medium enterprises in China from 2007 to 2016, this paper uses Euler equation model and GMM method to analyze the financing constraints faced by SMEs and the role of commercial credit in easing financing constraints. The results show that financing constraints do exist in SMEs and cannot be eased by commercial credit. Therefore, small and medium enterprises need to find other ways to solve the financing problem. Research Hypothesis and Model Selection.As risk-averse financial institutions, banks tend to issue loans to companies with considerable amount of mortgage assets and well-groomed audited financial statements. Small and medium-sized enterprises are suffered with greater risks because of their unstable operation and opaque accounts;