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RESEARCH PRODUCT

Alternative Financing of SMEs in the Baltic States: Myth or Reality?

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Abstract Alternative financing for small business can help companies whose owners can’t get traditional financing resources as small business loans, overdrafts and personal credit cards. New companies typically seek alternative financing when their companies have not been in business long enough to establish credit profiles with financial institutions. Access to alternative financing together with traditional financial resources represents one of the most significant challenges for new SMEs not only in the Baltic States but all over the world. Ensurance of new SMEs creation, existence and growth asks understanding of SMEs’ financing needs and alternative funding is one of them. Alternative financing for the Baltic States is rather new area as a result there is luck of theoretical and empirical researches in this field. During development of the paper the generally accepted qualitative and quantitative methods of economic research were used including comparative analysis and synthesis, graphical illustration methods. The study results highlight the importance of alternative resources as external financing for small developing countries as the Baltic ones. Conducted empirical analysis confirms that SMEs’ access to alternative financing in the Baltic States is improving and hopefully this market segment will be the way for the Baltic States to become innovative driven economies. © 2014 The Authors. Published by Elsevier Ltd.