The issuance of entrusted loans to non-affiliated enterprises by enterprises will affect the lenders’ resource allocation, which in turn affects their innovative behavior. If enterprises issue entrusted loans to non-affiliated ones mainly for rational use of their idle funds, it can increase innovation input by improving financial liquidity, thereby increasing innovation output. If enterprises issue non-affiliated entrusted loans mainly for short-term arbitrage, it may squeeze innovation resource, and is unfavorable for the increase of innovation output. As different enterprises have significant differences in capital status and governance structure, the innovation output effect of issuing non-affiliated entrusted loans will show obvious heterogeneity of enterprises. Taking A-share non-financial listed companies in Shanghai and Shenzhen stock exchanges from 2009 to 2019 as samples, the empirical test is conducted from the perspective of broad margin (whether non-affiliated entrusted loans are issued) and intensive margin (the scale of non-affiliated entrusted loans issued), and the results show that: The issuance of non-affiliated entrusted loans has a significant inhibition effect on the innovation output of sample enterprises, and the larger the loan scale, the stronger the inhibition effect. Relatively speaking, for the sample enterprises with lower financing constraints, higher ownership concentration and higher asset-liability ratio, issuing non-affiliated entrusted loans has a greater inhibition effect on their innovation output. The sample enterprises issuing or increasing the scale of non-affiliated entrusted loans will not promote the increase of their liquidity supply (that is, there is no fund saving effect), but will reduce their R&D intensity (that is, there is resource encroachment effect), thus inhibiting the growth of innovation output. The above conclusion warns that the high-quality development of Chinese enterprises in the new era needs to correct irrational capital allocation behaviors. On one hand, the financial regulatory authorities should conduct scientific guidance and appropriate supervision to restrain the short-sighted behavior of enterprises issuing non-affiliated entrusted loans mainly for short-term arbitrage and thus taking up the innovation input. On the other hand, enterprises should change their development methods, implement innovation-driven strategies, improve their capital structure, optimize their governance structure, and promote the growth of innovation input and output.