Financial risk early warning system for SMEs to establish the premise is to clear the causes and types of financial risk in order to determine the warning range from small and medium enterprises in China's environment and their own situation, their financial risk, there are two main causes of performance forms: First, risk financing, that is, companies in the case of income over expenditure can not occur under the risk of timely repayment of debt principal and interest, and second, the cash flow risk, that is, in a particular time, the cash outflows exceed cash inflows generated debt principal and interest due the risk can not, therefore, for our SMEs, the need to prevent major financial risk is the risk of financing and cash flow risk, of course can not ignore the risks of investment, capital recovery risk, security risk, price risk and exchange rate risk control and prevention.