Small innovation entrepreneurship nowadays suffers certain difficulties related to finding financial resources for starting up and development. Financing innovation projects of small entrepreneurship allows to solve several problems simultaneously, such as creating more jobs, improving welfare of the population, adjusting to changing conditions of the environment, etc. Within the framework of the study, a functional model of financing government-backed innovation projects in small entrepreneurship has been devised. The study results offer a context diagram and decompositions of several layers of government-backed financing scheme for small entrepreneurship. The practical value of the study is corroborated by a possibility to use the devised functional model for the purposes of strategic planning and monitoring small innovation entrepreneurship finance programs.