This thesis elaborates in detail the particularity of SME financing, I.e. the financing of small and medium sized enterprises in the Republic of Croatia. Since it differs significantly from the financing of large enterprise (LSE). It is necessary to analyze all of the different segments of funds for financing of small and medium sized enterprises which is also the alm of this thesis. Even though small and medium sized enterprises are only a part of the whole system, I.e. the economics in general, they are extremly important because the majority of new jobs arise tight from this sector. Innovation is the main competitive advantage but encouraging and financing it often represents a problem for the SME sector, especially in the beginning of realization of business ideas and projects. A risk which has as a circumstance the endurance of the enterprise on the market can be avoided with proper decisions regarding their financing, and the reason for failure lies exactly in the lack of financial resources. That is why many great business ideas did not live up.