Entrepreneurial ventures are one of the main drivers of economic growth and strengthening the country. Given that Small and Medium Enterprises have a large share in the total number of enterprises, their development plays a key role in the development of the entire economy both in the European Union and in Croatia. In order for Small and Medium Enterprises to develop their business, they need financial resources. Although small businesses in Croatia most often use internal sources of financing, they are often not enough to survive in an unstable and changing environment. With the entry of Croatia into the European Union and the opening of the possibility of using funds from European Union funds and programs, new opportunities for co-financing projects of Small and Medium Enterprises are opening up. The purpose and goal of writing this paper is to show the possibilities of development of Small and Medium Enterprises by financing from programs and funds of the European Union. The importance of European funds is that they are non-refundable, and thus do not burden the business of entrepreneurs in the long run, which makes them a very attractive source of funding. In addition, the paper will describe the procedure for obtaining European funds and the author will later analyze the use of allocated funds. The methods used in this paper are the method of collecting literature, the method of researching the given literature and the use of the method of description, classification, analysis and synthesis, and the method of deduction and induction. The main conclusions of the paper are that Croatia really has large amounts of funds at its disposal from EU funds and programs for the development of Small and Medium Enterprises. Unfortunately, much of these funds remain unused.