The study examined the effects of government financing policies on the growth of small and medium enterprises (SMEGR) in Nigeria over the period 1980 to 2025. The research focused on domestic borrowing-to-GDP ratio (DBGDPR), external borrowing-to-GDP ratio (EXTBGDPR), tax-to-GDP ratio (TGDPR), public investment ratio (PIR), and fiscal deficit-to-GDP ratio (FDGDPR) as proxies for government financing policies, while SME growth rate (SMEGR) served as the dependent variable. Exchange rate (EXR) and inflation rate (INFR) were incorporated as control variables to account for broader macroeconomic influences. Annual time series data were sourced from the Central Bank of Nigeria Statistical Bulletin, IMF, World Bank Development Indicators, National Bureau of Statistics, and OECD databases. The study employed the Autoregressive Distributed Lag (ARDL) approach which allowed simultaneous estimation of short-run and long-run effects among the variables. The results revealed that DBGDPR had a negative but statistically insignificant effect on SMEGR in both the short run and long run. In contrast, EXTBGDPR exerted a positive and statistically significant influence on SMEGR across both periods. TGDPR and PIR also exhibited positive and significant effects on SMEGR, reflecting the critical role of fiscal revenue mobilization and productive expenditure in creating an enabling environment for enterprises. FDGDPR recorded positive and significant coefficients, suggesting that moderate deficits facilitated government programs supportive of SME development. Control variables; EXR and INFR were found to have negative but statistically insignificant effects, indicating that currency instability and price fluctuations adversely affected SMEs. The study concluded that strategically targeted government financing policies significantly enhanced SME development in Nigeria through infrastructure provision, investment support, and fiscal interventions. The study recommended reducing excessive domestic borrowing, expanding productive external borrowing, strengthening tax utilization, increasing public investment, and managing fiscal deficits effectively to support SME growth.