Micro-enterprises are the leading force of every healthy economy. Irrespective of their “small size” micro-enterprises are very valuable for any national economic eco-system thanks to their contribution to employment and productivity as well as for their social role. 
 

Micro-enterprises, because of their small capacity, are very weak and vulnerable from the financial side. Because of that, access to finance for micro-enterprises is very important. 
 

Non-grant financing is the most common way to get a fresh injection of money in micro-enterprises.  This means that enterprises are raising money from financial institutions in the form of a loan or partnership investment. 
 

There are many financial institutions and intermediaries that can provide financing, but the most relevant for micro-enterprises are: banks, venture capital funds, business angels, crowdfunding, etc. 
 

Banks
Banks are financial institutions that mediate in payment operations and money is a main product for them. 
 

Banks
Banks collect funds from individuals or companies and pay interest for that (deposit); the key role as financial intermediaries of banks is to then redirect the funds collected through deposits, through loans to individuals and firms (loans). Banks charge companies and individuals a higher interest rate on the loans. 
 

Banks
Banks are the most used financial institutions all over the world. 
 

Banks
Micro-enterprises usually rely on bank services for their payment operations, and very often they also use other bank services such as: loans, guarantees, letters of credit, factoring, etc.  
 

Banks
Banks usually require collateral (i.e. an asset as a guarantee for the loan) when issuing loans to companies.
 

Venture capital funds 
Venture capital funds are financial institutions that are mostly oriented to financing profitable ideas.
 

Venture capital funds 
They are also working with money, but the main difference between venture capital funds and banks is that they are investing in good ideas seeking high returns on their investment in relatively shorter periods of time. 
 

Venture capital funds 
For them a good idea is only a profitable idea if there is a short period of return of investment. 
 

Venture capital funds 
Before investing, venture capital funds carry out so called “due diligence” to analyze and assess the viability of the business idea, including: review of previous operations of the company, management of the company, market analyses, and product analyses and most importantly – period of return of the investment. 
 

Venture capital funds 
For these services venture capital funds are not looking for collateral. They are eliminating risk with good analyses.
 

Business Angels
Business angels are a network of successful entrepreneurs who are looking for a business or good idea to invest their savings and  also as a means to diversify their business portfolio. They are often organized in networks to generate economies of scale and safeguard privacy. 
 

Business Angels
Business angels are open to good business ideas or well-organized business, and have become increasingly instrumental in supporting innovative start-ups. 
 

Every micro-enterprise should find the optimal way to finance the business. This means that management should make a decision on what type of financing is most suitable for the company, balancing aspects such as financing needs, cost of financing, timing and eligibility requirements.
 

Also, managers should take into account the time it takes to bring to completion for an application of a loan or investment. Typically, because of the factors above, bank debt (a traditional loan from a commercial bank) is often the most suitable for micro-enterprises.