Abstract: Chinese credit guarantee systems for SMEs (small and medium-sized enferprises) have formed basic scale and have produced beneficial effects on the SMEs' development, but there are three institutional defects in structure, operation and function of existing guarantee systems for SMEs. Based on analyzing why the above defaults exist,the critical way to keep sustainable development of the whole systems is such institutional innovations as the innovation of SME's credit guarantee system and the two Levels of its upper and down flows.