While peer-to-peer (P2P) financing mechanisms have recently gained significant popularity, small and medium sized enterprise (SME) entrepreneurs still harbor a considerable degree of skepticism about the role of governments in promoting alternative supply chain finance (SCF) solutions in the re-emergence of supply chain (SC) localization. This paper studies the SC financing problem of a capital-constrained SME entrepreneur under two alternative financing schemes provided by an online P2P lending-investment platform, namely debt financing (DF) and equity financing (EF). Considering the competition between a local and a foreign SC in a shared market, we investigate the direct (i.e., subsidizing domestic production) and indirect (i.e., subsidizing P2P platform service fee) roles of government intervention toward SC localization. Formulating a three-level Stackelberg game model, this paper presents a scenario-based decision-making framework to jointly evaluate four different SCF scenarios through the lens of local SC, P2P financing platforms, and government. The results reveal that there exist three possible regions (i.e., DF, EF, and Conflict), within which the government and the P2P financing platforms can examine the alternative SCF schemes in order to achieve a mutually agreeable agreement. Our sensitivity analysis on interest rate and exchange ratio suggests that, when financed via an online P2P lending platform (i.e., DF), the local SC always achieves a higher profit under the direct intervention policy. The indirect policy, however, is preferred only when EF is the main source of SCF and the exchange ratio is sufficiently high.