Supply chain finance plays a significant role in alleviating capital shortage, which optimizes supply chain performance. In this paper, we discuss the interaction of credit financing and channel encroachment in a dual-channel supply chain structure consisting of a supplier and a retailer. Under the Stackelberg structure, we observe the interaction between credit financing and channel encroachment is heavily dependent on the substitution degree, potential online market, and production cost. Intuitively, the supplier is more likely to choose trade credit financing, except in the case where both the potential online market, substitution degree, and production cost are small; under these conditions, bank credit financing may be an equilibrium strategy. As long as the production cost is below a certain threshold, the supplier will choose the trade credit financing strategy.