The Morrison Government has today introduced legislation that will allow the Government to invest in the Australian Business Growth Fund (BGF) to ensure that small and medium-sized businesses (SME’s) have access to the finance they need.
With better access to more competitive finance, SME’s will be able to grow, fulfil their potential and continue to underpin Australian economic growth and employment.
As announced at the election, the Government is committing $100 million in funding to establish 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. HSBC and Macquarie Group will each contribute $20 million.
This will give the BGF an initial investment capacity of $540 million, with the ambition to grow the fund to $1 billion as it matures.
Established Australian businesses will be eligible for long-term equity capital investments between $5 million and $15 million.
The BGF’s investment stake will be between 10 and 40 per cent, allowing small business owners to maintain a controlling interest, while also allowing the BGF to promote business growth.
The BGF complements other Coalition Government initiatives to support SME’s including:
- Establishing the $2 billion Australian Business Securitisation Fund which helps small businesses get the funding they need at a better rate.
- Increasing and expanding the instant asset write off to $30,000 for businesses with a turnover of up to $50 million.
- Providing tax relief for businesses with a turnover of less than $50 million, and reducing the tax rate from 30% to 25% – the lowest rate in 50 years.
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.