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This article uses panel data to test the extent to which trade credit acted as a substitute for bank finance in Small and Medium-sized Enterprises (SMEs), in the aftermath of the financial crisis of 2008. It demonstrates that the reduction in the supply of funds to SMEs was compounded by the contraction of net trade credit within the sector. Nevertheless, trade credit played a vital role in the adjustment of the sector by easing the burden of the financial crisis for some SMEs. Thus, the relative importance of trade credit increased for financially “vulnerable” SMEs that were less liquid, highly dependent on short-term bank finance, and with greater levels of intangible assets, when entering the crisis. In terms of a redistribution effect, financially stronger firms extended relatively more trade credit, to financially vulnerable SMEs in the aftermath of the financial crisis. In addition, the analysis demonstrates that the financial position of SMEs entering the crisis was more important in determining the impact of the financial crisis on trade credit use than company characteristics of age and size. JEL Classification: L26, L14, G20, B41, C33