Alternative Finance Act

Austria
Phase: Anticipation
Type:
  • Access to finance
  • Start-up support
  • Support of companies' growth
  • Support of SMEs
Sidst ændret: 18 November, 2020
Lokalt navn:

Alternativfinanzierungsgesetz (AltFG)

Engelsk navn:

Alternative finance act

Coverage/Eligibility

SMEs which:

  • employ fewer than 250 employees; and
  • have an annual turnover not exceeding €50 million; or
  • have an annual balance sheet not exceeding €43 million.

SMEs are not eligible when they have a concession pursuant to the Austrian banking act, the securities supervision act 2007, the alternative investment fund manager law, the payment services act, the insurance supervision act or the electronic money feature.

Main characteristics

This measure establishes crowdfunding as a legitimate alternative to the traditional loan finance for start-ups and SMEs to access funding. The alternative financial instruments included in the act are stocks, bonds, shares in companies and cooperatives, participation rights, silent partnerships and subordinated loans.

The act raises the threshold for publicly sourced funding from €200,000 to a maximum of €1.5 million, which means issuers will only have to draw up a simplified prospectus for loans up to these amounts. However, the maximum investment amount per private investor may not exceed €5,000 within 12 months.

In 2018, the 'alternative financing act' has been adapted. The threshold for the law to apply has been raised to €2 million within 12 months.

Funding

  • No specific funding required

Involved actors

National government
Legal framework and monitoring of compliance with the act.

Effectiveness

As the Federal Ministry of Digital and Economic Affairs has stated in a press release (see OTS) in September 2018, a total of 342 projects have been realised in the area of crowdinvesting. Until the end of 2017, the project volume has reached € 65,8 Million. For the first half year of 2018, an additional € 18,2 Million has been allocated with the help of this instrument.

Strengths

This act is the first of its kind in Europe. The OECD (2016) has reported that such measures have the potential to boost entrepreneurship and corporate investments.

Weaknesses

No information available.

Eksempler

Crowdfunding Examples (Donation and Reward): Küche am Graben, Kaahée, Mesnerhof-C, Magdas Hotel; Crowd-Investing-Examples: Alm-Resort Nassfeld, Kinderhotel Rudolfshof, Thermenhotel KUrz, Gasteiner Bergbahnen (Bank and Schopper 2017).
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