THE HON JOSH FRYDENBERG MP
SENATOR THE HON MICHAELIA CASH
Minister for Employment, Skills, Small and Family Business
27 November 2019
AGREEMENT TO ESTABLISH THE $540 MILLION AUSTRALIAN BUSINESS GROWTH FUND
The Morrison Government has today announced that it has agreed to terms with the four major banks, HSBC and Macquarie Group to establish the Australian Business Growth Fund (BGF).
The BGF will provide equity funding for small and medium sized businesses helping them to grow and fulfil their potential.
Small and medium-sized businesses can often find it difficult to obtain finance other than on a secured basis – typically, against the family home. They also find it difficult to access additional funding, once they have pledged all of their real estate as collateral.
As it announced at the election, the Government is committing $100 million in funding to the BGF and partnering with other financial institutions to provide equity funding to SME’s.
The major banks including ANZ, CBA, NAB, and Westpac have each agreed to commit $100 million to the BGF as a demonstration of their support of SMEs. HSBC and Macquarie Group will each contribute $20 million.
This will give the BGF an initial investment capacity of over $500 million, with the ambition to grow it to $1 billion as it matures.
Established Australian businesses will be eligible for long-term equity capital investments between $5 million and $15 million, where they have generated annual revenue between $2 million and $100 million.
The BGF’s investment stake in SMEs will be between 10 and 40 per cent, allowing small business owners to maintain their controlling interest, while also allowing the BGF to have sufficient influence to encourage business growth.
The BGF will operate commercially and be independent of both the Government and the participating banks. A board and an independent management team will run the BGF.
The Government is looking forward to working with the banks and financial institutions to get capital flowing to hard-working entrepreneurs across Australia.
With more than 3 million small and medium-sized businesses employing around 7 million Australians, enhancing small business access to funding is part of the Coalition Government’s plan for a stronger economy.