Could a US-style loan scheme save thousands of Australian businesses from closure as owners retire?
What’s happening: Coraggio, representing private business owners, is urging the Federal Government to introduce a US-style loan guarantee scheme to help buyers acquire existing businesses as hundreds of thousands of ageing owners prepare to retire, with 22% of small business owners now aged 60 or over.
Why this matters: Without succession support, many viable businesses will close rather than transition to new owners, causing significant economic disruption and potentially leaving regional communities without essential services as private equity swoops in to consolidate struggling sectors at low prices.
Australia faces a succession crisis that could see hundreds of thousands of small businesses disappear within the next decade, prompting calls for government intervention to prevent widespread economic damage.
Coraggio, one of Australia’s largest groups of private business owners, has called on the Federal Government to introduce a loan guarantee scheme modelled on the US Small Business Administration.
The US system, which has operated since 1953, helps entrepreneurs acquire businesses through government-backed loans. In 2024 alone, SBA loan programmes backed over $56 billion in funding, supporting more than 103,000 small businesses with loans allowing up to 90% loan-to-value ratios and historically low default rates. The approach reduces barriers for buyers seeking to acquire established businesses, which typically present lower risk than start-ups due to existing cash flow, customer bases and financial records.
Silver tsunami approaching
The urgency stems from demographic shifts within Australia’s small business sector. According to the Australian Small Business and Family Enterprise Ombudsman’s report Small Business Matters, 22% of Australian small business owners are aged 60 or over. The report also reveals nearly half of all small business owners are over 50, whilst just 8% are under 30, half the peak of 17% achieved in the mid-1970s.
Coraggio CEO Richard Skarzynski said the guarantee should extend beyond simple loan backing to include education programmes for successful applicants.
“Providing this type of loan structure is vital for business transition but there is no point in providing this mechanism to enable generational business acquisition if these new owners do not have the skills to maintain and grow the business,” Skarzynski said.
“Business owners want to be sure that the company they have built, probably over many decades, is going to be in good hands.”
Learning from America
The proposal has gained grassroots support beyond Coraggio’s membership base. Queensland accountant Chris Davey recently established petition EN7615 calling for a government-backed business loan guarantee scheme, which has garnered 1,274 signatures ahead of its 26 September 2025 closing date.
The petition requests the Federal Government establish a scheme including up to 80% loan-to-value lending for approved acquisitions, a government guarantee to reduce lender risk, streamlined application processes through participating banks, and specific support for women, Indigenous Australians and regional entrepreneurs.
Davey’s petition draws parallels with existing government support in the residential sector, noting that Australia offers loan guarantees through the Home Guarantee Scheme, which allows first home buyers to avoid paying Lenders Mortgage Insurance with only a 5% deposit.
The petition also highlights the economic returns generated by the US model, noting that for every $1 million lent, 3 to 3.5 jobs are created within three years.
Skarzynski emphasised that succession planning cannot rely solely on family transfers.
“That means the new owner should be surrounded by a strong advisory board of business leadership peers to ensure the funding is well directed to further growing these businesses and realising the dreams of the new owners and builds the economy,” he said.
“It’s a low-cost mechanism, and with this educational attachment becomes a low-risk, low-cost investment for the Government that provides the greatest return. It’s the fastest and lowest cost way to grow the economy.”
Regional risk
The implications extend beyond metropolitan centres, with regional and rural areas facing particular vulnerability. Skarzynski warned that many older owners operate small businesses in these areas, and their exit without successors could deprive towns of essential services and economic stability.
He also highlighted alternative outcomes if succession issues remain unaddressed.
“If these small businesses can’t be acquired, they will either shut and disappear or private equity funds will swoop in, pay very little for them and roll them up into a national business and put the prices up for the industry which is their pay back,” Skarzynski said.
Skills matter too
The demographic shift has accelerated over recent decades. The Small Business Matters report shows the most common age of small business owners is now 50 years, compared to 45 years in 2006. In the 1980s there were twice as many small business owners aged between 30 and 49 as there were aged over 50.
Younger buyers often struggle to secure traditional bank loans to purchase businesses, even when those businesses demonstrate solid financial performance and market position. The proposed guarantee scheme would reduce lender risk and open pathways for entrepreneurial buyers who lack substantial collateral.
“We need to value self-employment. Yes, it can be a hard slog, but it can also be very rewarding with the right advice both financially and personally,” Skarzynski said.
The Federal Government has not yet responded to either the Coraggio proposal or the public petition. The Australian government currently offers a free succession plan template to assist business owners in preparing their exit strategies, but financial support mechanisms for buyers remain limited compared to the US model.
As succession planning experts note, the process isn’t just about naming a successor but about protecting and strengthening a business’s foundations. Without comprehensive government-backed lending support, advocates argue Australia risks losing not just individual businesses but entire sectors of its entrepreneurial economy.
The petition can be viewed on the Australian Parliament’s e-petitions website under reference EN7615.
Related: Succession planning and why founders over 55 need this conversation
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