The paper considers a typical two-echelon supply chain，where the retailer buys a single product from the supplier，and sells it with a fixed price in a retail market． Since the retailer is capital-constrained，the supplier offers the retailer a trade credit contract，which allows the retailer to make a delayed payment to the supplier． This paper shows trade credit can encourage a capital-constrained retailer with limited liability to make a greater ordering level，and the ordering level is decreasing in the retailer’s initial budget. Furthermore，the paper shows trade credit contract is able to relax the retailer’s capital constraints，partly coordinate the capital-constrained supply chain，and create new value for all the players．