Alternative finans sources as a grant of effect for SMEs: SMEs receive grants from Karacadağ Development Agency an application on

In this thesis, grants, which the main support tools of the Development Agencies, and its effects on the SME's was discussed. Development Agencies with law no. 5449, in the two regions of Turkey, established in 2006 as a pilot application, in 2010 the institutional structure completed in twenty-six level 2 region. SMEs makes 90% of Commercial enterprises in our country, and SME support means a great extent directly support the real sector. There are some problems of the SMEs which considered as structural all over the Turkey; family-owned company, not recognize sufficiently the financial instruments, don't employee with professional managers, informal activities... etc. Besides these, depending on sector and location, may be other common problems faced by. One of the main tasks of the DAs to mobilize commercial potential of the regions and sectors that have the potential to support the development and thereby to reduce regional disparities. When determining to supports that given by Development Agencies, Regional Plan are based on and according to that plan Financial Support Programme prepared. Advantageous sectors of the region supports by Agency. As well as Development Agencies, other public institutions supports to SME's with grants and similar methods. Support programs for SMEs out of the public authority to carry out the different institutions, weakens the measurability of the effects of subsidies. In this study, TRC2 Region (Diyarbakır-Şanlıurfa) operating Karacadag Development Agencies support program, which was operated for SMEs in 2010, was discussed. Pre-and post-conditions of supported and unsuppurted SMEs was compared. From results the effectiveness and appropriateness of the grant mechanism was evaluated. Keywords: Grant, Development Agency, SME, Financing.