To clarify the impact of delayed government debt on innovation of private enterprises, this paper uses the 2016 special supervision action on government debt as a quasi-natural experiment. A difference-in-differences model is employed to examine the impacts and mechanisms of the special supervision action on the Non-SOE innovation. The results indicate that the special supervision action significantly increases Non-SOE R&D investments, with more pronounced effects when the fiscal pressure of local government or corporate over-indebtedness is lower, and the duration of management option incentives is longer. In terms of mechanisms, while confirming that the special supervision action directly reduces the corporate receivables, this study finds that the action enhances the operating cash inflow in the current and future years, and increases the total borrowing capacity from banks, which alleviating financial constraints and cash flow pressures and promoting R&D investments.