Big banks to pump $100 million each into business growth fund


The fund will sink between $5 million and $15 million into firms. Those businesses must have generated annual revenues of between $2 million and $100 million and show three years of revenue growth and profitability.

The fund, which the government hopes to have a total funding base of $1 billion, will take an investment stake of between 10 and 40 per cent. That will enable the firms’ owners to maintain a controlling interest.

The idea is modelled on similar schemes operating in Britain and Canada.

Mr Frydenberg said the fund could be pivotal for the expansion plans of Australian small businesses.

“With more than 3 million small businesses employing around 7 million Australians, enhancing their access to growth funding is part of our plan for a stronger economy,” he said.

“Small businesses are the engine room of the Australian economy and access to a range of funding sources, including equity, is crucial for a thriving mall and medium-sized enterprises (SMEs) sector.”

The fund will operate commercially and be independent of the government and participating banks. However, banks will be able to refer customers to the fund.

Treasurer Josh Frydenberg will announce the fund on Wednesday.Credit:Alex Ellinghausen

A board and independent management team will run the fund.

While the big four and HSBC have made the initial investment in the fund, the government is talking with other financial institutions which may invest.

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When the idea was revealed by Mr Morrison earlier this year it was envisioned superannuation funds would also contribute.

The government is hoping the fund will be able to help SMEs to expand operations, into other parts of Australia, or to make investments in technology that will boost their profitability and productivity.

Apart from direct cash injections, the fund will offer non-financial support such as strategic advice and network referrals.

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