In recent years, China's local government debt and corporate debt issues have attracted the attention of academia and the government. At present, the financing difficulties of SMEs have become a problem in the industry. Although the existing literature has studied the impact of local government debt on the debt financing of micro enterprises, the academic circles still hold disputes on the "crowding out effect" and "crowding in effect" of local government debt on micro enterprise behavior. This paper selects the panel data of provincial local government debt and A-share listed companies from 2012 to 2020 to explore the impact of local government debt on corporate debt financing from the scale and structure of corporate debt financing. According to the empirical results, the expansion of local government debt will lead to a decline in the debt financing level of local enterprises. From the perspective of different debt sources, the impact of local government debt expansion is significantly different. Local government debt expansion has a strong and significant crowding out effect on corporate financial liabilities, while this effect on corporate operating liabilities is weak. Accordingly, this paper puts forward corresponding suggestions: local governments should reasonably control their own debt scale, implement differentiated deleveraging policies according to local conditions, strengthen the cooperation between financing platforms and private capital, vigorously develop the direct financing market, and create good conditions for enterprise financing.