<p>Regarding the resolution of financing difficulties faced by SMEs, prior research has predominantly emphasized the significance of internal financial conditions and external market environments, neglecting the role of nonmarket factors, specifically corporate pollution control, in formal lending. This paper pays attention to the significant yet overlooked role of corporate pollution control, which has been employed by SMEs to build their political legitimacy and gain formal financing resources. Drawing upon institutional theory, particularly the concept of political legitimacy, this paper initially examines the correlation between corporate pollution control and formal lending. Furthermore, it unravels the varying moderating effects of two types of relationships with government (i.e., political connection and the incorporation of state-owned capital) on the aforementioned correlation. Empirical evidence gathered from a sample of 416 SMEs in China provides robust support for our theoretical propositions. By introducing a nonmarket strategy explanation to the determinants of formal lending and elucidating the simultaneous influence of corporate pollution control and relationships with the government on formal lending, this paper makes a significant contribution to the existing literature on institutional theory and corporate financing.</p>