Small to medium-sized enterprises (SMEs) have become increasingly important in our society as providers of employment opportunities and as key players for the well-being of local and regional communities. However, while there is a general recognition of the importance of the SME in many economies, it is also recognised that they face many barriers and difficulties in operating in competitive, dynamic environments where the need to be innovative is a constant driver. The dearth of innovative SMEs in Europe has been a perennial problem for policy makers for many years and the low participation of SMEs in European R&D funding mechanisms has led to calls to make funding programmes more ‘SME-friendly’. This paper draws on empirical research from a large-scale survey of 764 European SMEs. Preliminary findings show a range of internal and external barriers affecting the participation of SMEs in EU funding programmes.