The article analyzes the current development status of small and medium businesses in Russia. The authors reveal the dynamics of changes in the structure of investments in the Russian economy, where the share of small and medium businesses is especially noted. The direction of the trend and the expected trend of national entrepreneurial activity in the country are determined. The role of state support for small business development is assessed and the main directions in this area are determined. The main sources of financing for small and medium businesses are analyzed. The role of lending in this sector of the economy is noted; issues, risks, and prospects for the use of innovative methods of small business funding are identified. The analysis of the activity of participation of small businesses in the market of debt securities is carried out. In particular, the dynamics of the volume of placement of bonded loans of the small business sector is analyzed, the possibilities of entering the equity capital market through an IPO are being studied. Another innovative area of small and medium business funding is the venture capital financing, which is the most attractive for new startups. The authors revealed a fourfold increase in this type of financing over the past four years. In addition, the article also provides an assessment of alternative sources for small and medium business funding.