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Ombudsman supports Business Growth Fund for high growth SMEs

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Kate Carnell today welcomed the announcement of an Australian Business Growth Fund, a recommendation in the ASBFEO’s 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 (SMEs) 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, we question the absence of commitment by Westpac, ANZ and Australia’s super funds.

“Importantly, the Fund will be managed by private sector expertise and will benefit SMEs with annual turnovers between $2 million to $50 million.

“Minority shareholding up to 40% will enable these businesses to retain control of their company; a very different scenario from traditional private equity funding.

“Similar models in the UK and Canada are tried and tested; addressing barriers to accessing affordable capital for businesses that have gone on to demonstrate successful growth.

“We also support modification of Australian Prudential Regulation Authority (APRA) regulations to set an appropriate risk weighting to make it a viable proposition for private sector investment.”

Media release distributed by AAP Medianet.

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Loren Webb

Loren Webb

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