The popular view portrays social capital as wholly beneficial with no significant downside. Based on case studies of Shaoxing and Tiazhou in Zhejiang Province，the paper explores relationships among social capital，structure of inter-firm financial network and inter-firm risk contagion，and provides empirical evidence for downsides of social capital. The paper suggests social capital，used to seeking financial supports by firms，is positively linked with mean value of degree centrality in the financial network，leading to less fragmented network structure，and is positively linked with clustering coefficient of the network. Then，Social capital exacerbates inter-firm risk contagion by adversely influencing structure of inter-firm financial network.