The ECB has raised key interest rates - Consequences for German small and medium-sized enterprises
In its decision of 10.9.2026, the European Central Bank (ECB) raised its three key interest rates by 25 basis points each. German small and medium-sized enterprises (SMEs) are thus caught between higher financing costs and continuing sluggish economic momentum.
Higher financing costs are putting a strain on the SMEs
The reason for the rate hikes cited by the ECB was persistent inflationary pressure; this has been exacerbated by, among other things, the conflict in the Middle East and the associated risks to energy prices. At the same time, the ECB is anticipating economic growth in the euro area of just 0.9% in 2026.
The hike in key interest rates will likely make refinancing and follow-up financing more expensive and, at the same time, an increase in interest charges on existing floating-rate loans can be expected. Companies with high debt levels or regular refinancing requirements will be particularly severely affected. Even small rises in interest rates can result in appreciable additional costs where large lending volumes are involved and can reduce the available financial leeway. Therefore, many companies are paying even more attention to securing their liquidity.
Investment decisions are going to become harder
A higher interest level will also affect the profitability of future investment projects. Those that promised attractive returns under more favourable financing conditions will have to be reassessed in the light of the changed circumstances. This will particularly impact long-term investments, for example, in production facilities, digitalisation and automation projects, or capacity expansion.
Schwache Konjunktur erhöht die Unsicherheit
Apart from the higher financing costs, the economic environment also remains challenging. The ECB is anticipating economic growth in the euro area of just 0.9% in 2026 and 1.4% in 2027. At the same time, the central bank expects an average inflation rate of 3.0% in 2026 and 2.5% in 2027. This would mean that, in both years, inflation would remain above the medium-term target of 2%.
For SMEs that generate a substantial part of their revenues in the euro area, the weak economic growth may be accompanied by more restrained demand and investment activity on the part of customers. Furthermore, the persistent economic uncertainties make the planning of the developments in revenues, earnings and liquidity more difficult. This applies especially to companies in cyclical sectors, which are particularly sensitive to changes in the economic situation.
Opportunities for firmly positioned companies
Amid an environment of rising interest rates and increased economic uncertainty, sound financing structures as well as forward-looking liquidity planning are increasingly gaining in importance. Companies with sufficient liquidity reserves, sustainable financing and a robust equity base have greater latitude in the way they respond to changes in the market. For companies that are soundly financed, opportunities will arise in such an environment, for example, if these companies realise investments for which competitors lack the financial leeway. Alternatively, they can also bolster their market positions via selective acquisitions.
