4. Austria
As in many EU countries, SMEs contribute substantially to Austria’s economy. In 2019, 99.7% of all firms were SMEs employing approximately 66.8% of the labour force.
The capital structure of SMEs in Austria is traditionally biased towards debt financing, whereas limitations on access to risk-finance are still apparent. Bank lending is therefore an important factor affecting the availability of external financing for SMEs. However, access to finance is generally not a major concern for Austrian SMEs. Despite the COVID-19 pandemic, which severely affected the economic environment, only 8% (compared to 10% of European SMEs) stated in 2020 that access to finance is one of their main concerns.
Following the COVID-19 pandemic, Austria showed an increase in medium- and long-term loans, as government guarantees typically covered loans with medium-term maturities and up to EUR 1 million. This reflected a shift in the financing needs of businesses, since loans were taken to bridge liquidity shortages and build up liquidity buffers. However, loan growth differed across industries depending on how much they were affected by the pandemic. Overall, the share of new SME loans (i.e. up to EUR 1 million) increased by more than 3 percentage-points to 15.3%.
To mitigate the negative economic effects of the COVID-19 pandemic, the Austrian as well as European governments provided unprecedented (fiscal) stimulus programs to non-financial corporations including SMEs following the modified EU “Temporary Framework to support the economy in the context of the coronavirus outbreak”. The enlargement of loan guarantee programmes offering bridge-financing and special lending conditions resulted in a sharp decline of the spread between SME loans (i.e. loans with a volume of up to EUR 1 million) and loans to large firms down to 0.23%. In comparison, this spread has been rather stable over the last years reaching 44 basis points (0.44%) on average until 2019.
In Austria, limitations on access to risk-finance (e.g. Venture Capital) are still apparent and have always been considered to be a particular weakness of the Austrian innovation system. Official data reported by Invest Europe show no clear trend over time, with frequent ups and downs.
Bankruptcies (per 1 000 enterprises) fell sharply by -40.7% in 2020 compared to 2019, reaching the number of 3 106. This development can be explained by a wide range of fiscal and other crisis response measures set up by the Austrian Federal Government to help affected companies through the crisis quickly and accurately. For example, the obligation to declare insolvency has been temporarily suspended. For a sustainable recovery after a recession, it is essential to ensure structural change, improve business dynamics and strengthen firms’ equity ratios. A catch-up effect and the realization of an insolvency backlog have to be considered once the policy measures end or are phased out.
In 2020, initiatives and supporting measures of the Austrian Government concentrated primarily on tackling the economic and financial consequences of the COVID-19 pandemic and on helping affected companies through the crisis quickly and accurately. In order to mitigate the economic disadvantages, the financial aids ensure the liquidity of companies and focus on:
As in many EU countries, small and medium-sized enterprises (SMEs) contribute substantially to Austria’s economy. According to Statistics Austria, 99.7% of all firms were SMEs employing approximately 66.8% of the labour force in 2019. In general, the biggest sector for SMEs in Austria is “wholesale and retail trade”, accounting for more than one fifth of overall SMEs and employment. Focusing on mere numbers, this sector is followed by “professional, scientific and technical activities” and “accommodation and food service activities”. However, “Production of goods” is the second largest sector in Austria considering the key factors employment and turnover.
In general, access to finance is not a major concern for Austrian SMEs. According to the Survey on the access to finance of enterprises (SAFE) of the European Commission from November 2020, only 8% (compared to 10% of European SMEs) stated in 2020 that access to finance is one of their main concerns. The capital structure of SMEs in Austria is traditionally biased towards debt financing, whereas limitations on access to risk-finance are still apparent. Due to the fact that Austria is integrated into the Euro area and the European Union, most regulatory or supervisory policies regarding financial markets are decided at the European level. Changes in credit finance partly result from increased regulatory requirements on securities/equity of banks and are in line with common EU developments in this area (e.g. Basel III -- especially since 2008 in the aftermath of the financial crisis).
Due to the COVID-19 pandemic, SMEs reported a sharp deterioration in the economic environment in 2020 as business activities and access to finance was severely affected. Based on the “Annual Survey on the Access to Finance of Enterprises 2020 (SAFE 2020)” of the European Commission, key indicators such as “turnover” and “profit” of Austrian SMEs declined by roughly 40%. “Fixed investments” and “working capital” also turned negative, whereas the “debt to assets” ratio -- an indicator of how much leverage a company is using compared to its equity -- turned slightly positive (4% compared to 8% (EU-27)).
In Austria, like in most European countries, approx. 62% of SMEs rely on bank funding (credit lines and bank loans) as their primary source of external finance. The banking sector is therefore an important factor affecting the availability of external financing for SMEs. In general, SMEs have to face a higher risk-premium and tighter lending criteria (such as collateral requirements) compared to larger firms. This can be explained by higher information asymmetries (e.g. lack of reliable and timely information) leading to higher monitoring costs. As equity ratios in companies rise with the size of their balance sheets, SMEs by definition tend to have a higher default risk as well.
In Austria, the public sector has therefore established various credit guarantee programs (e.g. via public promotional banks such as the Austria Wirtschaftsservice GmbH (aws)) to increase the willingness of banks to provide loans to SMEs as they transfer the associated risk. Therefore, bank lending to SMEs is traditionally quite resilient and remained stable between 2014 and 2019, with a short setback in 2016.
In this country profile, SME loans are approximated by data of new business loans to non-financial corporations up to EUR 1 million provided by the Austrian National Bank. The loan data exclude loans granted to sole proprietors, revolving loans and overdrafts, which are an important source of bank lending to SMEs. Considering these conditions, new loans to SMEs (i.e. up to EUR 1 million) rose in 2020 by 6% compared to the year before. Therefore, bank loans remained a central tool for maintaining companies’ liquidity during the COVID-19 pandemic.
At the beginning of the COVID-19 pandemic, short-term loans (with a maturity of up to 6 months) made a large contribution to loan growth. In the subsequent process of the crisis, however, medium- and long-term loans increased as government guarantees were typically addressing loans with medium-term maturities and up to EUR 1 million. This reflects the companies’ changed financial needs, because loans were taken out to bridge liquidity shortages and build up liquidity buffers. However, loan growth differed across industries depending on how much they were affected by the pandemic.
On the other side, new loans to non-financial corporations of more than EUR 1 million went down by 20% in 2020 leading to an overall decline of new loans to non-financial corporations by 16.5% against the year before. Facing an unsecure short-term growth outlook, the non-financial corporations’ need for external financing plummeted in 2020 as investment projects were postponed and sizeable liquidity buffers had been built up in the first phase of the pandemic. Furthermore, demand was also impacted by the availability of alternative support measures to support liquidity including deferred payments of taxes or debt moratoria.
Overall, the share of new SME loans (i.e. up to EUR 1 million) increased by more than 3 percentage-points to 15.3%, which is mainly driven by the above mentioned increase of medium- and long-term loans. According to the data reported by the Austrian National Bank (OeNB), the share of short-term loans to SMEs (maturity up to 6 months) already started to decrease significantly in the years before the COVID-19 pandemic. The changing conditions have further boosted the fundamental adaptation of SMEs’ financial structure resulting in an increased importance of long-term financing. Since 2009, the share of short-term SME loans in total SME loans had been decreasing from almost 60% to 22.79% in 2019 and reaching just 17.80% in 2020.
Data on outstanding loans are not separated according to firm size and are only available for the total non-financial corporate sector. As external financing took mainly the form of debt in 2020, outstanding business loans to non-financial corporations reached a peak of EUR 169.8 billion in total and an annual growth rate of 5.0% (compared to 7.1% in the euro area -- see Figure 4.1).
Note: Annual change in stocks adjusted by exchange rate adjustments, write-downs, loan transfers and reclassifications.
Source: Austrian National Bank (2021).
According to the Survey on the access to finance of enterprises (SAFE) of the European Commission from November 2020, bank lending in the EU27 has seen significant net improvements between 2015 and 2019, whereas the relevance of bank loans as a source of external financing has been consistently decreasing.
In 2020, however, SMEs in the European Union reported a sharp deterioration in the economic environment due to the COVID-19 pandemic. The rising macroeconomic uncertainty and the general economic outlook negatively affected access to finance. It still did not become a major concern though, as “other issues - incl. COVID-19 related issues” (18%), “finding customers” (21%) and “recruitment” (19%) were still considered as the most important bottlenecks. However, as a result of policies aiming to support enterprises in view of the COVID-19 pandemic, grants and subsidized loans became significantly more important as a source for external financing.
The reported needs of European SMEs and availability of financing therefore reflected the impact of the COVID-19 pandemic in 2020 as the majority of SMEs in the EU27 show an increasing need for funding in 2020. In total, credit lines (incl. overdrafts) were relevant for 50% and bank loans for 48% of European SMEs. In Austria, these sources were even more important as credit lines were relevant for 62% and bank loans for 52% of Austrian SMEs. Between April and September 2020, 33% of Austrian SMEs applied for a bank loan, which aligns with the average of European SMEs (EU: 35%). Only 2% of Austrian SMEs had not applied for a bank loan because they feared their application would be rejected (EU: 4%). Of those SMEs that applied for bank loans, only 4% were rejected by the banks (EU: 6%), whereas 72% received the full amount they had applied for (EU: 70%).
The expectations about the future availability of all types of financing fell significantly as well. According to the SAFE Results from April to September 2020, 28% of European SMEs (27% of Austrian SMEs) indicated in 2020 a deterioration in the actual availability of bank loans versus 13% (6% of Austrian SMEs) that will expect an improvement. Compared to other euro area countries, these figures of the Austrian credit market are quite favorable. In general, the SAFE survey 2020 confirmed that access to finance is a lesser concern to Austrian SMEs with only 8% (EU: 10%) of domestic respondents naming this as their most pressing problem.
This is in line with data from the Austrian National Bank. Historically low bank lending rates continued to support lending to the corporate sector in Austria. This reflects the current monetary policy of the ECB as well as narrower interest rate margins for average loans due to the competitive situation in the Austrian banking sector. In addition, the Austrian as well as the European governments provided unprecedented (fiscal) stimulus programs to non-financial corporations including SMEs to mitigate the negative economic effects of the COVID-19 pandemic. At the same time, moratoria on repayments and public guarantees for bank loans allowed banks to provide new lending offering short-term relief to firms in an environment of compressed cash flows and ensuing needs for working capital. Accordingly, loans by domestic banks, whose share in debt financing had already been comparatively high in recent years, accounted for more than half of debt financing in 2020. Their role was particularly important in the first two months of the pandemic, when firms took recourse to short-term loans to secure liquidity.
Since the outbreak of the COVID-19 pandemic, interest rates on new loans to nonfinancial corporations slightly decreased reflecting the easing monetary policy measures. While interest rates on larger loans (with a volume of more than EUR 1 million) rose, rates on smaller loans decreased in the first months following the onset of the pandemic. This was especially true for interest rates on loans with an interest fixation period of 1 to 5 years. This is typically the size and maturity bracket of guaranteed loans, for which risk considerations are less of a concern. With the role of guarantees in the development of loans diminishing, the interest rate on loans of this size and maturity rebounded slightly in the first Quarter of 2021. This resulted in a sharp decline of the spread between SME loans and loans to large firms down to 0.23%. In comparison, this spread has been rather stable over the last years reaching 44 basis points (0.44%) on average until 2019.
In total, debt instruments continued to be attractive supporting lending to the corporate sector and provided therefore again the bulk of nonfinancial corporations’ external financing in 2020. The average base rate on new loans to non-financial corporations up to EUR 1 million, which serves as a proxy for SME interest rates, is declining since the end of 2011. At the end of 2020 this rate amounted to 1.59%.
The access to funding for young, innovative SMEs has to be regarded differently as their risk profile and their capital structure require different financing approaches compared to funding for traditional SMEs. Creditors and investors treat small, innovative, young firms differently due to their elevated risk profile, missing track record and the high share of intangible capital in their assets, which can hardly be valued by standardized approaches.
Innovative SMEs and start-ups tend to look for risk capital or Venture Capital in the form of equity stakes as their business models are risky and can hardly cover pre-specified repayment schedules, maturities and interest rates regardless of their success. Due to the lack of economies of scale, significant transaction costs and resource-consuming investor relations, debt funding via capital market by issuing bonds or commercial paper is not an option to most SMEs. In addition, the size of their financing needs makes SMEs unattractive to institutional investors like pension funds or insurance companies, which tend to look for large single investment opportunities (at least EUR 5-10 million). Besides this, SMEs in Austria as well as in Europe often refrain from equity funding, because they are concerned about loss of control.
In Austria, limitations on access to risk-finance (e.g. Venture Capital) are still apparent and have always been considered to be a particular weakness of the Austrian innovation system. Since the outbreak of the financial crisis in 2008, the Austrian Private Equity/Venture Capital sector was struck by a withdrawal of most of its institutional private investors - particularly banks, insurance companies and family offices - leading to the current market situation.
Official data reported by Invest Europe regularly show ups and downs and no clear trend toward an ever increasing market size. This volatility is clearly visible in Table 4.3, where total venture and growth capital slumped in 2016 to almost EUR 86 million after a peak of EUR 197 million in 2015, and immediately recovered in 2017 reaching an all-time high of EUR 287 million.
Despite the COVID-19 pandemic, venture and growth capital investments in Austria again reached more than EUR 250 million in total, which is mainly due to high investments in the later stage venture- and growth segments. This development is in line with the European market with stable investments in the Venture Stages on a high level and a recorded rebound in the second half of 2020.
Similar to most (smaller) European countries, the characteristics of the Austrian Private Equity/Venture Capital market are (1) high volatility in branch-distribution of investments and (2) high volatility of the amount (investment-size) invested in Austrian portfolio companies. Due to the relatively small total market volume, large single investments - mostly in the Buyout segment - have disproportional effects. In 2018, for example, the buyout segment accounted for only 13.2% (or: 10 companies) looking at the absolute number of Austrian companies, but totalled 86.9% of the total invested risk-capital market volume.
Nevertheless, active investments of international investors might be an indicator for the continuing demand of Austrian companies in risk capital (PE and VC), high quality of investment opportunities for institutional investors in Austria and a high quality of deal pipeline/potent SME to invest in. In 2020, the share of Domestic Investments from Austrian Risk-capital Funds was approximately 14.1% (2019: 38.3%).
Based on the characteristics of the Austrian risk-capital market, three main challenges can be identified: 1) Increasing the mobilization of private risk capital to enable a continuous and successful fundraising, 2) Scaling-up of Austrian-based risk-capital investment companies, 3) Reducing the high volatility of investments to stabilize the market volume. Additionally, the allocation of more risk capital to more early stage firms has to be increased as they have a very low share in VC investments.
Previous results of the “European Payment Index” published by Intrum show that in general, the payment behaviour - B2B as well as B2C - in Austria is well above the EU average. However, due to the COVID-19 pandemic credit losses among Austrian companies increased in 2020 causing that late payments are increasingly threatening the survival of Austrian firms. On average, the time limits for payments for B2B (2020: 50 days) are longer than for B2C (2020: 24 days) customers in Austria. In 2020, the number of B2B payment delays increased sharply by 13 days and is now at +14 days. The average number of B2C payment delays increased as well and reached +9 days in total -- both figures are slightly above the EU average.
According to the Insolvency Statistic 2020 published by Creditreform, bankruptcies in Austria fell sharply by -40.7% compared to 2019 reaching just a number of 3.106 in 2020. This paradox development can be explained by a wide range of fiscal and other crisis response measures set up by the Austrian Federal Government to help affected companies through the crisis quickly and accurately. For example, the obligation to declare insolvency has been temporarily suspended. For comparison, a stable development was recorded in terms of bankruptcies per 1 000 firms remaining at approx. 11 cases per year until 2019.
According to a study by EcoAustria estimating the insolvency backlog, the GDP decrease in 2020 would be associated with an increase in declared insolvencies of 34,4% compared to 2019.The further development in the years to come will therefore depend on the recovery of the economy after the COVID-19 pandemic and on further (European) Government policy response measures. Furthermore, a catch-up effect might set in and the insolvency backlog could be partly realized once the policy measures end or are phased out. For a sustainable recovery after a recession, it is essential to ensure structural change, improve business dynamics and strengthen firms’ equity ratios.
In Austria, several institutions at the federal as well as on the state level provide financial support for businesses. This section focuses on federal institutions providing loan guarantees and/or direct lending to SMEs. The Austria Wirtschaftsservice GmbH (aws) serves as the federal promotional bank and offers Austrian enterprises financial support in the form of loans (via the ERP-Fund), guarantees, grants and equity, as well as consulting services. The Forschungsförderungsgesellschaft GmbH (FFG) is the national funding institution for applied research and development and provides grants, loans, guarantees and consulting services. The Oesterreichische Hotel- und Tourismusbank (ÖHT) is owned by private banks and is specialised in financing and promoting investments in the field of tourism by means of loans, guarantees and grants, which are supported by the government.
The ERP Fund1 (European Recovery Programme Fund) was established in 1962 and provides soft loans (ERP loans) with reduced interest rates via commercial banks to new and existing businesses in the areas of technology assistance, implementation of research and technological development initiatives, and establishment of pilot and demonstration facilities. It is organised as a separate legal entity and is organisationally integrated into the aws since 2002. The ÖHT serves as the trust bank of the ERP Fund in the tourism sector. The ERP-annual working programme adopted by the Austrian Federal Government sets up the underlying conditions of the ERP-loan programmes. Currently, the credit line volume for ERP-loans is capped up to a total of EUR 600 million. On average, 99 % of the beneficiaries are SMEs, and from that about 92% are micro and small companies. In 2020, the total available volume of ERP-loans (EUR 600 million) was committed to Austrian-based companies and out of that approximately EUR 520 million to SMEs.
Besides ERP loans, ÖHT also grants various loan programmes such as ERP-loans, so called “Top-A loans” or ‘impulse’ loans to SMEs seeking capital for investments in the tourism and leisure sector. These loans aim at supporting small as well as large investment projects to increase the competitiveness and long-term development of companies. In general, a combination with a government guarantee programmes is possible. In line with the EU state aid regulation, the respective state government (regional level) can provide additional benefits such as subsidized interest rates on the loan.
The FFG, as well as several institutions at the regional level also engage in direct lending to SMEs. Based on the data provided by the federal institutions aws, FFG and ÖHT, a total volume of EUR 793 million of new direct loans were granted to SMEs in 2020.
Loan guarantees
The Austrian federal promotional bank aws facilitates access to finance for new ventures, innovation projects and growth spurts with loan guarantee programs in order to compensate for missing of insufficient bank loans.
In line with EU State Aid Regulation, the guarantees are funded with government support and can be combined with other programs such as ERP-loans. In general, the aws guarantees up to 80% of the total loan amount. The aws funds are channelled through existing aws guarantee products designed for SME loans, the promotion of SME innovation, micro credits and investments in Austria.
The interaction of national initiatives with European Union (EU) programmes such as COSME, HORIZON 2020 and EFSI are essential for facilitating access to finance especially for SMEs. Since 1998, the aws fosters cooperation with the EIB/EIF in various programmes to increase the attractiveness of the national portfolio and reduce existing market failures. The aws has therefore signed various counter-guarantee agreements with the EIF (e.g. under InnovFin/HORIZON 2020, COSME and EFSI) allowing the Austrian federal promotional bank to increase its guarantee volumes to SMEs with limited collateral and innovative mid-caps. One key element of this agreement is that the aws has to ensure additionality, which means that all benefits resulting from this agreement have to be transferred to the respective company. The combination with EU financial instruments increases the attractiveness of aws loan guarantees (e.g. due to reduced guarantee fees) and is therefore an important tool for Austria to facilitate access to finance for SMEs.
Loan guarantees granted by ÖHT are counter-guaranteed by the Government. The guarantees cover loans from commercial banks, but can also be combined with ERP-loans and TOP-A loans granted by ÖHT. To a lesser extent, loan guarantees are also provided by the FFG. In 2018, more than EUR 300 million in total of government loan guarantees provided by Austrian federal institutions were committed to SMEs to facilitate access to finance supporting their projects (see Table 4.4).
In view of the long-term positive experiences, the regular loan guarantee programs were enlarged in 2020 by bridge-financing loans as a major COVID-19 economic response measure following the modified “Temporary Framework to support the economy in the context of the coronavirus outbreak” of the European Union. These loan guarantees offer specific terms and conditions tailored to cope with the negative effects of the COVID-19 pandemic and enable banks to offer bridge-financing loans on special lending conditions. These specific terms and conditions are, for example, guarantee rates up to 100%, zero-interest rates for a limited period, and limited eligibility of companies in difficulties. The aim is to secure the liquidity and to facilitate the financing of working capital loans from companies, whose sales and earnings development is impaired by order, delivery or other market changes due to the COVID-19 crisis.
Single point of contact remained the principal bank. Depending on the company, the application is forwarded to “Austria Wirtschaftsservice” (for SMEs), “Österreichische Hotel- und Tourismusbank” (for tourism companies) or “Oesterreichische Kontrollbank” (for large companies).
Risk capital
In order to stimulate the development of a well-functioning market for risk capital, the Austrian federal government implemented various innovative policy approaches to stimulate the development of a well-functioning risk capital market. This includes public financed Venture Capital Funds, Fund-of-Fund programs as well as legislative measures (e.g. Law on Crowdfunding).
Overall, these public initiatives are primarily focused on mobilising private risk capital to enhance access to finance for young, innovative Small and Medium Enterprises in the early and growth stages and improve therefore their long-term financial stability. To eliminate any state aid component, the public financed initiatives are carried out by subsidiaries of the Austrian Federal Promotional Bank "Austria Wirtschaftsservice (aws)". In the long run, existing "financial gaps" in traditional debt financing instruments (e.g. loans) should be removed and the actual "market failure" should be reduced.
In January 2019, the Vienna Stock Exchange launched the new market segment “direct market plus” as a first and easy access to the capital market. This segment addresses particularly small and medium enterprises and offers therefore low stock exchange fees and less strict listing requirements. From the very start, eight companies are already listed on this new segment of the Vienna Stock Exchange. In the long run, the Austrian Capital Market should be an additional instrument for improving access to finance for SMEs - particularly for later stage and large growth investments.
In mid-2020, the Austrian federal government set up the “aws COVID-19 Startup Hilfsfonds” with a total volume of EUR 50 million tailor-made to the needs of young, innovative companies to mitigate the negative effects and tackle liquidity-problems resulting from the COVID-19 pandemic. This instrument supported new investments by doubling fresh equity capital paid by private investors into those eligible companies.
Other COVID-19 pandemic related economic support measures relevant for SMEs2
The Austrian Federal Government has set up a broad mix of instruments and supporting measures to tackle the economic and financial consequences of the COVID-19 pandemic and to help affected companies through the crisis quickly and accurately. The focus is on companies (mostly SMEs, but also large companies), which are confronted with major losses in turnover as a result of the COVID-19 crisis, and sectors which are particularly affected by measures such as entry bans, travel restrictions and bans on meetings.
In order to mitigate the economic disadvantages, the financial aids ensure the liquidity of companies and focuses on:
Mitigating the loss of revenue as a result of the crisis -- e.g. Non-repayable grants to cover fixed costs and loss in revenues
Measures facilitating economic recovery -- e.g. Loan guarantees for bridge-financing loans
Stimulation of the labour market -- e.g. Corona short-time work
The COVID-19 Investment Premium was set up as an incentive for corporate investments in order to counteract the subdued investment confidence of Austrian companies. Awarding non-refundable grants for investments provides additional far-reaching impetus for investments, growth and employment. In general, the investment premium amounts to 7% of the investment costs and takes the form of a non-refundable grant. A higher premium of 14% is paid for new investments in following priority areas: digitisation, greening/ecologisation and health/life science. Climate-damaging investments are explicitly exempted as well as the acquisition of commercial properties, buildings and capitalized own services (and others).
This funding program targeted all companies, whose headquarters or operational sites are located in Austria and carrying out investments in depreciable fixed assets and supports the growth of companies by temporarily reducing investment costs. In total, the submissions reached a volume of EUR 7.8 billion -- out of that (based to the latest estimation), a total volume of EUR 5 billion is expected to be paid out.
The specific Hardship-fund for EPU, micro enterprises and new founders is mainly directed to new self-employed persons, one-person companies and micro-enterprises according to the EU definition. Payments from the hardship fund are a non-repayable, tax-free grant up to EUR 30.000 in total and is designed as an immediate emergency aid to cover losses of income.
All companies with headquarters or place of business in Austria and which perform operational activities in Austria suffering from serious liquidity shortfalls and loss of revenue because of the COVID-19 crisis and the imposed security measures are granted a non-repayable grant to cover fixed costs and loss in revenues. In the first phase until September 2020, for example, the subsidy awarded to cover fixed costs can be claimed for up to three consecutive months. The fixed costs grant is staggered according to amount of lost revenue and is limited to a maximum of EUR 90 million per company. Every company can directly submit the application for payment of the fixed costs online via the online Tool of the Austrian Tax and Revenue Office “FinanzOnline”.
The Corona short-time work is a tailor-made support for companies affected by the COVID-19 crisis and safeguards employment. It is designed to preserve the liquidity of companies and secure jobs, regardless of the particular size and sector of the company. During the planned period of short-time work, working hours can be reduced to a level between 10 percent and 90 percent of the contractually stipulated normal working hours. Depending on their salary range, the employees continue to receive between 80 percent and 90 percent of their previous salaries (net salary guarantee) from their employers and guarantees therefore a minimum income.
The Austrian Public Employment Service (AMS) compensates employers for the costs of the working hours lost (short-time work grants) in line with specified flat rates, and thus, for the most part, the additional costs arising in comparison to actual working time. This is done when certain prerequisites are fulfilled (e.g. economic difficulties in connection with COVID-19, social partnership agreement, lost working hours).
In addition to the financial support programmes, the Austrian Federal Government has adopted several special tax regulations and reliefs regarding tax and social security contributions such as:
Reduction of the advance payments of income and corporate tax for 2020 down to zero,
Payment facilitations such as deferment or payment instalments,
Application for late payment charges and non-imposition of late charges.
Since the beginning of the COVID-19 pandemic in March 2020, most programs have been regularly adjusted to take into account the massive restrictions for several sectors and economic justifications.
As of 25 August 2021, approx. EUR 39.8 billion of COVID-19 support measures are granted/paid out in total. The TOP 3 are:
Source: See table 4.5
References
Austrian Business Agency - Invest in Austria (2021) “Support measures for companies affected by COVID-19”, https://investinaustria.at/en/blog/2020/03/covid-19-support-measures-companies.php
Austrian National Bank (2021) “Financial Stability Report 41” (June 2021), https://www.oenb.at/en/Publications/Financial-Market/Financial-Stability-Report.html
Creditreform (2021): “Insolvenzstatistik 2020”, https://www.creditreform.at/fileadmin/user_upload/Creditreform_Oesterreich/Aktuelles_Wissen/Wirtschaftsforschung/Insolvenzstatistik_AT/2020/Insolvenzstatistik_2020.pdf (only German)
ECO Austria (2021): “Estimated insolvency backlog and projected increase in the number of firms with long-term negative equity after COVID-19 (May 2021), https://www.bmdw.gv.at/Services/Publikationen/Insolvenzueberhang.html (only German)
European Commission (2020) “Survey on the Access to Finance of Enterprises - Results 2020, Analytical Report 2020 ”, https://ec.europa.eu/growth/access-to-finance/data-surveys_en
European Commission (2020) “Survey on the Access to Finance of Enterprises - Results 2020, Results by country”, https://ec.europa.eu/growth/access-to-finance/data-surveys_enEY (2021) “EY Start-up-Barometer Europa 2020”, https://www.ey.com/de_at/news/2021/04/ey-start-up-barometer-europa-2020
Federal Ministry of Finance (2021) “Corona-Hilfsmaßnahmen auf einen Blick”, https://www.bmf.gv.at/public/informationen/corona-hilfsmassnahmen.html (only German)
Intrum AB (2021): “European Payment Report 2020”, https://www.intrum.com/press/publications/publications-archive/
Invest Europe (2021) “Investing in Europe: Private Equity activity 2020”, https://www.investeurope.eu/research/activity-data/
KMU Forschung Austria (2021): “Finanzierung von KMU 2020: Corona-Hilfen tragen
wesentlich zur Schließung von Finanzierungslücken bei“ (June 2021), only German
Statistics Austria (2021) “ Structural Business Statistics 2019” (Leistungs- und Strukturstatistik 2019 - Hauptergebnisse nach Beschäftigtengrößenklassen), https://www.statistik.at/web_en/statistics/Economy/trade_services/structural_business_statistics/index.html
Notes
← 1. It is a government-run service organisation which is funded by grants given to Austria under the Marshall Plan by the United States of America
← 2. Pls. note that the following instruments as well as the mentioned specific terms and conditions are selective and therefore incomplete in order to give a quick overview of national COVID-19 crisis response measures.