The Australian Office of Financial Management has approved a maximum investment of $90 million into a Prospa Group Limited warehouse trust through the Structured Finance Support Fund.
The Structured Finance Support Fund (SFSF) was announced by the government in March as a $15-billion investment fund, established to support and enable smaller lenders to continue lending to small businesses and individual customers throughout the COVID-19 pandemic.
Under the SFSF, the Australian Office of Financial Management (AOFM) was provided with $15 billion to invest in structured finance markets often used by smaller lenders that provide consumer and business finance.
The $90-million investment in Prospa’s warehouse facility is the maximum investment amount approved by the delegate under the Structured Finance Support (Coronavirus Economic Response Package) Act 2020 and the actual committed limit may be lower than this.
Commenting on the announcement, Prospa chief executive Greg Moshal said: “We commend the government for recognising how important small businesses will be to our economic recovery and for their support programs like the SME Loan Guarantee Scheme.
“This investment through the SFSF of up to $90 million into our lending capacity, coupled with our $223-million allocation through the SME Guarantee Scheme, comes at a critical time.
“These programs will work together and enable Prospa to quickly deliver funding to small businesses and support Australia’s economic recovery.”
Since the launch of the SFSF in March, the AOFM has made primary market investments in Firstmac and Liberty, secondary market investments in Pepper, Resimac, LaTrobe and Thinktank, and warehouse investments in Judo Bank, Latitude Financial, Athena Home Loans and Columbus Capital, among other lenders.
[Related: ACCC expands SFSF administration]