Availability of alternative financial resources for SMES as a critical part of the entrepreneurial eco-system: Latvia and Italy

The importance of non-traditional alternative/innovative financing is gaining recognition in both developed and emergingeconomies throughout the world (OECD 2012; EC 2013; ECB 2013; ECB 2014). SME financing in Europe remains primarily bank based, in spite of the many policies proposed to develop alternative financing instruments (e.g. adopting directives on venture capital, improving the transparency and visibility of SMEs on capital markets, etc.) The paper aims at understanding the availability of alternative resources for SMEs by analyzing them rigorously, understanding the obstacles for the development of non-bank finance and developing recommendations to overcome them. The research is therefore to expose recent trends in innovative financing in Latvia and Italy, significantly enhancing the evidencebase on this key source of entrepreneurial finance. As a source of ‘smart money’, supporting new and early stage businesses, innovative providers are widely accepted as being a critical part of the entrepreneurial eco-system.