Access of businesses to external finances shows as one of main barriers which are faced businesses in region and Kosovo too. Increasingly is growing role of access to external finance to SMEs for investment and development. The study of factors affecting the supply side and demand side of financial instruments can provide a better picture of how businesses can facilitate access to external sources of funding. Financing businesses largely depend on developing of financial sector and its instruments in country. In Kosovo, this sector market is limited to within the banking sector and credit is the main instrument for funding. There is clear evidence that small businesses are limited to accessing external finance than large businesses. Viewing from the financial offer side, credit conditions are point out - in Kosovo especially the interest rate appears as a limiting factor in obtaining external finance. I estimate that interest rate is high in Kosovo because the financial offer is limited while financial requests of businesses are high. This paper is based on enterprise-level data from the survey of 500 SMEs led by BSC Kosovo in order to analyze the determinants of obtaining finance from banks when applying. Also we used the data provided by the Central Bank of Kosovo on Kosovo's financial sector. This paper aims to address the above issues and draw conclusions and recommendations on SME financing from external sources.