Credit guarantees have both positive effects, such as encouraging borrowing and investment by small and medium-sized enterprises (SMEs) by taking on risks that private financial institutions cannot bear alone, and negative effects, such as less non-credit guaranteed loans which reduces monitoring and increases moral hazard. By analyzing the large-scale credit guarantee programs implemented during the past two economic crises in Japan we observe the following: (1) guaranteed loans are used by high credit risk firms with positive book values; (2) the increase in credit-guaranteed loans exceeds the decrease in non-credit guaranteed lending, improving the financing environment for firms; and (3) there is no improvement in the subsequent performance of firms receiving guaranteed loans. Following the implementation of each of the programs, the government has made institutional revisions in order to strengthen the involvement of financial institutions and credit guarantee corporations with the firms receiving guaranteed loans. As such, it is important to understand what impact these measures will have on the performance of these firms.