The European Investment Bank (EIB) announces a new loan to finance the projects of small and medium-sized businesses in Austria. On this occasion the EU bank is teaming up with regional bank Hypo Vorarlberg, which will pass on the proceeds to eligible firms in its market segments. The two parties signed their first €95 million loan agreement yesterday evening in Bregenz.
As well as small and medium-sized enterprises (SMEs), so-called midcaps (firms with up to 3 000 employees) and public and private sector entities wishing to carry out small and medium-scale projects in Austria will also be eligible for financing. Individual projects can receive up to €12.5 million of EIB funding. Under the agreement Hypo Vorarlberg undertakes to match the EIB loan with at least the same amount, giving a further boost to its medium and long-term corporate lending volume. The individual sub-loans will have a maximum maturity of 15 years.
Through this cooperation, the EIB, which is already providing loans in a number of other Austrian regions, can substantially increase its involvement in the federal state of Vorarlberg. As a regional bank, Hypo Vorarlberg targets not only the state’s large corporates but also its small and medium-sized businesses – a market segment that is one of the EIB’s financing priorities. Last year alone, the EIB Group (the EIB plus the European Investment Fund) provided loans for SMEs totalling some €22 billion, and its commitment this year is of the same order of magnitude.
When signing the agreement, EIB Vice-President Wilhelm Molterer said that providing SMEs with financial support sent an important signal at a time of hesitant investment and a stagnant economy. “Investment is urgently needed to boost growth in Europe. And this is true for Austria too. As in the rest of Europe, smaller businesses play a key role here because they are widely established and create sustainable jobs. SMEs are also able to respond quickly to market requirements and changes in demand. But this presupposes a stable market environment and flexible and appropriate financing. Together with Hypo Vorarlberg, the EIB is creating a framework for meeting such firms’ financial needs rapidly and precisely”.
Hypo Vorarlberg’s Chairman Dr Michael Grahammer added: “We are delighted to be working together with the EIB, which will enable us to continue performing our role as a strong financing partner for the domestic economy responsibly. Our two banks complement one another brilliantly with their strategic orientation and many years of financing experience. This will especially benefit our region’s small and medium-sized businesses by providing attractive borrowing terms.”