WAYS OF FINANCING THE DEVELOPMENT OF NEW BUSINESS STRATEGIES FROM PUBLIC AND EU FUNDS

Abstract

Each innovative enterprise, irrespective of who undertakes it and in what scope, entails capital expenditure. Ways to attain the capital, the amount of the required capital and sources of financing depend on the size of the company, form of ownership, the environment, and firstly the venture undertaken. Available literature describes various methods of finance source classification based on the distribution criteria. Methods of financing depend on various factors, such as the technology transformation model and transformation type. Ventures and innovation projects may be financed from different sources. It may be own or foreign capital. Both accessibility, as well as the ways of gathering such types of capital for financing innovative enterprises varies. With internal financing the easiest way is to finance through accumulated profit and depreciation write-offs. Such funds are, however, too limited to finance innovation enterprises in small and medium enterprises. They play a more significant role in big enterprises. Out of external funds, in small and medium enterprises, the major role is played by subsidies, co-financing and venture capital. In theory, small and medium enterprises can also use bank loans. In practice however, thanks to a stable position on the market, large enterprises stand a better chance of using bank loans for financing innovation. That is why the majority of small and medium enterprises finance innovation ventures using various sources, both own capital, as well as foreign capital.