Micro, small and medium-sized enterprises (SMEs) are considered to be the engine of the European economy. In EU SMEs make up more than 99% of all companies and provide around 75 million jobs. They are a key source of job creation and stimulation of entrepreneurial spirit and innovation and are therefore essential for fostering competitiveness and maintaining employment in the EU. Yet SMEs often have problems in raising funds to finance fixed investments and inventory and working capital. SMEs mostly use internal sources while the most important external sources of SMEs are bank loans, which are not easily accessible. Hence, one of the priorities of the European Commission is stimulating SMEs through EU funds and programs in order to enable SMEs development and finally to contribute to economic growth. SMEs sector also dominates the economic structure of Croatian economy and they have similar financing problems. However, Croatia in period 2014 – 2020 have at disposal a total amount of 10.676 billion of euros from European structural and investment funds, of which 8.397 billion are aimed for cohesion policy objectives and 470 million euros are aimed for the development and competitiveness of SMEs. Besides, EU programs COSME and HORIZON 2020 are intended to provide direct support to SMEs and to create a favorable environment for their development. However, even though the number of successful project applications for small and medium-sized enterprises in the total share of Croatian project applications is relatively high, fund absorption has not reached satisfactory levels. Using the sample of Split-Dalmatia County’s SMEs, this study finds out reasons for low absorption capacity from SMEs point of view: SMEs are interested in funds from European Union, but are not sufficiently familiar with their availability i.e. funds at their disposal, especially programs COSME and HORIZON 2020; SMEs state that they know how to apply for EU funds but considered the procedure as complicated and demanding regarding documentation, and that the needed knowledge and know-how for proposal is beyond their scope; SMEs are not satisfied with the cooperation with state institutions, especially Ministry of Regional Development and EU funds and Croatian Chamber of Economy. We point out four main conclusions: (1) SMEs are not enough aware of EU financing possibilities; (2) additional promotion of EU programs directly to SMEs is required; (3) additional education of SMEs regarding project proposal and documentation is needed and (4) more proactive policy of state institutions and cooperation with local authorities is expected. Finally, greater awareness and professional help might be a key in strengthening the SMEs, whose entrepreneurial spirit and innovation process is a prerequisite for economic growth and development.