Main Types of Funding
Written by: Marco della Schiava (05/26)
For startups and small businesses, grants are often the most relevant type of funding, as they are non-repayable and typically cover 25 – 80% of project costs.
Public funding in Germany and Austria is a structured system where governments provide financial support to companies to drive innovation, economic growth, and societal goals such as sustainability, digitalization, and technological progress.
Governments use these programs to encourage businesses to invest, grow, create jobs, and strengthen the country’s long-term competitiveness. Instead of giving away money freely, funding is tied to clearly defined projects that align with these strategic goals.
For companies, this means they can receive grants, subsidies, or tax incentives that significantly reduce the financial risk and cost of projects they already plan to execute – if they structure and present them correctly.
To receive funding, companies usually need to apply with a clear and convincing project proposal that fits the requirements of a specific funding program. The process is competitive and therefore requires strong positioning and well-prepared applications.
Grants
Non-repayable funding for innovation, digitalization, and sustainability projects.
Examples for Germany:
ZIM (Zentrales Innovationsprogramm Mittelstand)
Germany’s largest innovation funding program for SMEs, supporting R&D and technology development projects.
KMU-innovativ
Supports high-tech research and innovation projects by SMEs.
EXIST Startup Grant
Funding for technology and university-based startup founders.
Examples for Austria:
FFG Basisprogramm
One of Austria’s most important R&D funding programs, supporting innovative startups and technology companies.
aws PreSeed & Seedfinancing
Early-stage funding for innovative startups.
Vienna Business Agency Innovation
Funding for innovation projects focused on customer-centered product and service development, esp. for businesses in Vienna.
Loans
Subsidized loans with favorable conditions, often via public banks.
Examples for Germany:
KfW ERP Digitalisation and Innovation Loan
Supports investments in digitalization and innovation.
KfW Startup Loan (ERP-Gründerkredit)
Supports high-tech research and innovation projects by SMEs.
Examples for Austria:
aws ERP Loans
Low-interest financing for innovation and growth projects.
Tax incentives
Especially relevant in Austria (e.g., R&D; tax bonus of ~14%).