Abstract
In order to make credit guarantee contract more scientific and subjective, it has built a credit guarantee financial contract model with default repayment factor considered. The analysis result has shown that credit guarantee institution may agree to guarantee or refuse to guarantee for SME when the retained earnings of SME is zero. There is a critical value of retained earnings for SME when the retained earnings is over zero. When it is over the critical value, the optimal strategy of credit guarantee institution may be to guarantee all application to obtain bank loan for SME according to the allocation proportion for credit guarantee risk with bank. When it is less than the critical value, credit guarantee institution is willing to guarantee part of application to obtain bank loan for SME, that is, credit guarantee may carry out credit guarantee rationing.
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