The small and medium-sized enterprises (SME) have had an important impact on the economical development in the various countries of the European Union, and Germany has not been exceptional. In terms of its economy and population, Germany is ranked as the top one nation in the European Union (EU). Its systems of politics, economy and society have had a signifi cant infl uence on the formation of the European Union. The wide-ranging policies and programs with regard to the SME fi nancing launched by the federal government of Germany can be the model for many EU member countries. Therefore, this article will introduce German SME fi nancing System from four aspects: (1) SME policies and programs; (2) SME fi nancing policies; (3) SME fi nancing source; (4) credit guarantee system. At last, this research gives the suggestions concerning the future policy and regulation making by applying the successful experience and practice in Germany to our country.