Financing SMEs and Entrepreneurs 2026: Austria
Table of contents
SMEs continue to play a central role in Austria’s economy, accounting for 99.8% of all enterprises and employing nearly two-thirds of the total workforce. Their contribution to gross value added remains significant, at around 63%, underpinning the country’s industrial and service-oriented base. In 2024, SME performance diverged across sectors. Manufacturing and construction experienced mild contractions due to weaker demand and higher input costs, while the hospitality and business service sectors showed stronger growth, supported by increased domestic consumption and tourism recovery. Labour shortages remained a key constraint, particularly in technical and skilled professions.
Austria’s macroeconomic environment in 2024 was characterised by a slow recovery after two years of stagnation. Real GDP grew by approximately 0.7%, while inflation declined from its 2023 peak but remained elevated at around 4.2%, driven largely by energy and housing costs. Monetary conditions began to ease from mid-2024 following the European Central Bank’s first rate cuts since 2022, and lending rates started to decline gradually in the third quarter. Nevertheless, financing costs remained above pre-pandemic averages.
Against this backdrop, SME lending stabilised in 2024 after two years of contraction. The total volume of new SME loans reached around EUR 6.6 billion and the share of SME loans in total new corporate lending stood at around 12%. In 2024, outstanding business loans to non-financial corporations increased marginally to EUR 210 billion, continuing the gradual upward trend observed in recent years. SME lending volumes remained broadly stable at around EUR 93.7 billion, representing 44.7% of the total corporate loan stock. Although lending to SMEs did not expand significantly, stability in credit availability was an encouraging sign given the tighter monetary environment and persistent cost pressures.
Credit conditions improved slightly towards the end of the year but remained tighter than before the monetary tightening cycle. The average interest rate for SME loans eased slightly to 4.5% in 2024, following a peak of 5.0% in 2023, as financial markets began to anticipate further monetary easing by the European Central Bank. Credit spreads between SMEs and large firms narrowed modestly to 0.2 percentage points, reflecting continued risk differentiation but also competitive lending conditions in Austria’s banking sector.
Non-bank finance remains underdeveloped relative to Austria’s bank-based system but is gradually expanding. Venture and growth capital investment rose to EUR 135 million in 2024 after a sharp decline in 2023, supported by later-stage funding rounds. Leasing and factoring also expanded steadily, with factoring volumes exceeding EUR 36 billion and leasing transactions rising to over EUR 6.5 billion.
Non-performing loans (NPLs) remained at historically low levels, 3.1% for SMEs and 2.9% for total business loans. Public support measures introduced during the pandemic were largely phased out, yet SME credit quality remained stable.
Austria’s macroeconomic environment in 2024 was marked by slow but steady recovery following two years of stagnation. Real GDP grew by approximately 0.7%, supported by improving export demand and a gradual rebound in private consumption. Inflation declined from its 2023 peak but remained elevated at 4.2%, driven mainly by energy and housing costs. The Austrian National Bank (OeNB) noted a stabilisation in business sentiment in the second half of the year, although investment intentions among SMEs remained cautious.
Monetary conditions began to ease in mid-2024, following the European Central Bank’s first rate cuts since 2022. This policy shift was reflected in Austria’s credit market, where lending rates started to decline slowly in the third quarter. Nevertheless, the cost of finance remained above pre-pandemic averages, constraining investment for smaller firms with limited collateral.
Financial institutions maintained ample liquidity and strong balance sheets, supported by stable deposits and low default rates. Credit standards remained conservative, particularly for start-ups and microenterprises, but there were no signs of significant credit rationing. SMEs’ demand for financing was subdued, reflecting both reduced investment appetite and the desire to deleverage after several years of volatility.
Overall, 2024 represented a transition year for Austria’s financial landscape, marked by disinflation, cautious optimism, and the first indications that tighter monetary conditions were beginning to normalise.
SMEs form the structural foundation of Austria’s productive economy. They account for over 67% of total employment, 63% of value added, and play a crucial role in maintaining the social and economic fabric of regional communities. Microenterprises dominate the services sector, particularly in trade, tourism, and professional services, while small and medium-sized firms drive innovation in manufacturing, green technologies, and digital services.
In 2024, SME performance diverged across sectors. Manufacturing and construction experienced mild contractions due to weaker demand and higher input costs, while the hospitality and business service sectors showed stronger growth, supported by increased domestic consumption and tourism recovery. Export-oriented SMEs benefited from improving foreign demand, especially from Germany, Italy, and Central and Eastern European markets.
Labour shortages remained a key constraint, particularly in technical and skilled professions. SMEs continued to report challenges in recruiting qualified workers, which limited expansion plans and slowed digital transformation. The government and social partners maintained targeted measures to support vocational training, reskilling, and labour mobility to mitigate structural gaps in the workforce.
In 2024, SME lending stabilised after two years of contraction. The total volume of new SME loans reached approximately EUR 6.6 billion, comparable to 2023, reflecting steady credit demand despite ongoing economic uncertainty. The share of SME loans in total new corporate lending stood at around 12%, underscoring SMEs’ continued reliance on traditional bank financing.
Short-term lending accounted for 22% of total SME loan flows, reflecting limited working capital needs amid moderate production and trade activity. Long-term loans showed slightly stronger dynamics, particularly for investments in green transition technologies, digitalisation, and process modernisation.
Credit conditions remained broadly favourable, supported by competition among Austria’s well-capitalised banks. The overall rejection rate for SME loan applications stayed low, at around 9%, while utilisation rates (the ratio of loans used to those authorised) hovered at 13%, suggesting that many SMEs remained cautious in drawing down available credit lines.
Although interest rates moderated towards the end of the year, firms still faced elevated financing costs compared to the pre-2022 period. Nonetheless, credit quality remained robust, and the incidence of payment delays or defaults was contained.
The average interest rate for SME loans up to EUR 1 million declined from 5.0% in 2023 to 4.5% in 2024, mirroring the shift in monetary policy. For larger firms, rates fell from 4.8% to 4.3%, maintaining a modest spread of 0.2 percentage points. Despite higher nominal rates than before the tightening cycle, the spread between SME and large corporate lending remained among the lowest in the EU, reflecting Austria’s competitive and stable banking environment.
Collateral requirements remained stringent, particularly for new borrowers, but did not tighten further in 2024. Banks continued to emphasise long-term client relationships, often extending preferential terms to firms with established credit histories.
Non-performing loans remained at low levels: 3.1% for SMEs and 2.9% for total business loans. While there was a slight uptick in early 2024 due to weaker cash flow among smaller firms, overall asset quality remained solid. The proportion of non-performing SME loans stayed well below the EU average, highlighting the resilience of Austrian businesses and prudent banking practices.
Austria’s market for non-bank finance remains underdeveloped relative to its banking sector but is gradually expanding. Venture and growth capital investment rose to EUR 135 million in 2024, following a sharp decline in 2023. Although still below the pre-pandemic average, the recovery was driven by a resurgence in later-stage funding rounds and strong interest in clean technology, biotech, and digital solutions.
Public and quasi-public investors such as aws Gründerfonds, OeKB, and FFG continued to play a vital role in bridging market gaps. Programmes under InvestEU and the European Investment Fund (EIF) also supported risk-sharing mechanisms to stimulate private equity participation. Leasing and factoring activities expanded steadily, with factoring volumes exceeding EUR 36 billion and leasing transactions rising to over EUR 6.5 billion, reflecting SMEs’ growing preference for flexible financing.
Despite these advances, structural barriers remain. The domestic venture capital ecosystem is still small compared to European peers, with a limited base of institutional investors. Enhancing market depth, investor incentives, and exit opportunities remain key policy priorities to strengthen SME access to equity-based financing.
The financial health of SMEs remained stable overall. Payment delays averaged 13 days for B2B and 7 days for B2C transactions, comparable to previous years. Corporate insolvencies increased moderately to around 5 700 cases, returning to pre-pandemic levels after several years of historically low figures. This increase reflected the gradual withdrawal of temporary fiscal and credit support measures introduced during the COVID-19 crisis.
The bankruptcy rate per 1 000 firms rose slightly to 14, still moderate by historical standards. The rise was most pronounced in retail and hospitality, sectors more exposed to cost fluctuations and demand volatility. However, the vast majority of SMEs maintained sound financial positions, with stable cash reserves and low leverage ratios.
The SME sector’s overall creditworthiness and repayment discipline continue to underpin the resilience of Austria’s financial system.
In 2024, Austrian SME policy focused increasingly on long-term competitiveness, innovation, and sustainability. With crisis-related support largely phased out, the government redirected efforts towards structural transformation in line with the green and digital transitions.
The aws and FFG continued to provide financial instruments aimed at stimulating innovation and investment in climate-friendly and digital technologies. Programmes such as the aws Growth Investment Programme and aws Garantie supported SME financing through guarantees and co-investments, particularly for innovative start-ups and growth firms.
Direct lending and guarantee volumes declined compared to 2021–2022, reflecting both lower demand and reduced risk exposure. However, policy emphasis shifted towards mobilising private capital, strengthening venture and growth equity markets, and aligning Austrian instruments with EU-level funding initiatives.
In addition, new measures targeted the development of sustainable finance, digitalisation of SME financial management, and simplified access to EU and national support schemes. These initiatives aimed to foster an investment-friendly environment that enhances SMEs’ role in driving Austria’s twin transition and long-term competitiveness.
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Please cite this publication as: OECD (2026), Financing SMEs and Entrepreneurs 2026: An OECD Scoreboard, OECD Publishing, Paris, https://doi.org/10.1787/075d8058-en
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