Small and medium-sized enterprises (SMEs) in Croatia face challenges in accessing funding for their growth and development. The government and regional units play a crucial role in creating a supportive business environment. The research focuses on identifying institutional and regulatory barriers to SME financing in Croatia and proposes improvements to the existing system. By enhancing the competitiveness of SMEs, there is potential for increased investment and the development of new products with higher added value. With Croatia's EU membership, financial support oversight has shifted to the European Commission, leading to a shift towards more EU funds and less national support for SMEs.