Sources of financing for small and medium enterprises represent the area which specific characteristics are quite different from the source and financing conditions that apply to large companies. Specificities faced by small and medium enterprises in the search for funding sources often cause headaches to the people in those companies who are responsible for the provision of financial resources. Those problems and obstacles are even more pronounced in transition countries, where financial market is still not fully developed, so the large companies are facing with problems, and for the small and medium enterprises there are little or no opportunities. To fix the problem, problem needs to be well analyzed and clarified. Because of that, in the work there will be made a comparison of the developed markets in European Union, and more advanced transition countries with Croatia considering the sources of funding that are available to SMEs. Today, there is more and more talk about of a grant from the EU funds, where the small and medium enterprises are considerd to be the main pillars of development. Entrepreneurs are invited to apply for the various contests. This work will try to answer the question how much the sources of financing from programs and funds of the European Union are actually suitable and how much do they help to entrepreneurs. In the end, will be a practical example POC - the innovative concept which was organized by CASB - BICRO, Croatian Agency for Small Business, investment and innovation.