This paper examines how preferential credit based on retailers’ credit line impacts on capital-constraint retailer’s operational decisions. We consider a condition of loan competition when banks and manufacturers offer preferential credit to capital-constraint retailers in the newsvendor model. Different credit lines and discounted rates of preferential credit mainly involve in retailers’ exogenous collateral and risk preference of banks and manufacturers in our model. We investigate impacts of bank financing, trade credit, and portfolio credit (financing from both bank credit and trade credit with different ratios) on retailer’s inventory decision with different cases that the retailer’s financing amounts exceed credit line or not. We derive the equilibrium wholesale price, expected sale price, and order quantity when retailers face with different conditions of collaterals and institutes’ risk preferences facing with market risk. A debt-financed retailer favours items with trade credit compared to bank financing, especially in conditions when its sourcing demand is great and when it finances from high-risk preference institutes. Retailer prefers to using the loan with high trade credit ratio when he opts portfolio credit conditions.