The paper is aimed at the assessment of opportunities for the financing of innovative activities in Latgale region. The analysis is based generally on the case of Rezekne. Firstly, the problem is determined - Latgale is the weakest region in Latvia from economical development point of view. Secondly, the overview of the financial resources for innovative activities is given. Finally, the author argues his opinion on necessity to develop innovative business in order to improve the situation in Latgale. One of the most important aspects that hamper Latgale's development is the lack of financial resources. The optimal schemes for the financing of innovative business are offered. The research lead to the conclusion that finances for sustainable development of innovative business could be attracted through the Latgale's small enterprises (SMEs) cooperation with regional higher education institutions (Rezekne Higher Education Institution, Daugavpils University), business support centres and Rezekne Special economical zone structures.

Latvia has become a fully-fledged Member State of the European Union (EU) and now is a part of the global integration processes. The EU has set a goal to form a knowledge-based society and to become a region with a dynamic economy. For this reason it is necessary to increase scientific research and innovation capacity. The scientific potential is characterized by adequate supply of materials, facilities and equipment. It is a precondition for any kind of productive scientific activity. It must be noted that equipment, along with materials and resources necessary for their maintenance and operation in scientific institutes and by groups of scientists, has not experience any significant improvement since the Soviet period. Since 1990, budgetary funding for science has been sufficient to ensure a mere survival. In 2004, Ministry of Education and Science, together with scientific institutions, drafted the National Programme "Support for Modernization of the Scientific Infrastructure in the State Research Institutions". The funding made available through the EU Structural Funds can be used for purchasing new scientific equipment for the state research institutions.