The Morrison government has committed to establishing an SME growth fund, designed to provide “high growth potential” businesses with greater access to capital.
The Coalition government has announced that if re-elected, it would establish an Australian Business Growth Fund to facilitate up to $1 billion in capital investment to the SME sector via a funding arrangement between the federal government and the banking and superannuation sectors.
Prime Minister Scott Morrison has pledged $100 million to the fund, with the Commonwealth Bank, NAB and HSBC Bank matching his commitment.
Businesses with an annual turnover of between $2 million and $50 million will be eligible for the scheme and would retain a minority shareholding of up to 40 per cent.
The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has welcomed the Coalition’s announcement, which the ombudsman called for in the Affordable Capital for SME Growth report.
“Our report identified the need to address a critical funding gap for long-term, patient capital to enable our up-and-coming, high growth potential small to medium enterprises to flourish,” Ms Carnell said.
“We support government investment of $100 million into the Australian Business Growth Fund and a matching commitment by the Commonwealth Bank of Australia, National Australia Bank and HSBC Bank.”
However, Ms Carnell raised concerns over a perceived lack of commitment from ANZ, Westpac and Australia’s superannuation funds, which are yet to pledge funding to the program.
Pointing to the establishment of similar schemes in the United Kingdom and Canada, Ms Carnell said that such arrangements are “tried and tested”, claiming that they’ve helped facilitate access to affordable capital for businesses that have “gone on to demonstrate successful growth”.
The government’s commitment to establishing the SME growth fund is the latest policy initiative targeted at fuelling growth in the SME sector.
Both houses of Parliament recently approved the government’s measures to establish a $2 billion Australian Business Securitisation Fund and extend the instant asset write-off.
“These measures are designed to produce another 250,000 new small and family businesses over the next five years,” the Prime Minister said.
[Related: Bill to establish $2bn SME fund approved]
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