Product design is an essential part of the new product innovation, which is affected by availability of financing. In the paper, we study the relationship between financial services and capacity of product design, and examine whether capacity of product design contributes to the improvement in performance of the small and medium manufacturing enterprises. The research shows that, financial service has a significant and positive influence on both of capacity of product design and performance of the small and medium manufacturing enterprises, and capacity of product design mediates the link between financial services and performance of the small and medium manufacturing enterprises.