Business Growth Fund formally launches
The government has formally established the Australian Business Growth Fund, allowing growth-geared SMEs to apply for long-term equity capital investment.
The Australian Business Growth Fund will allow established SMEs with annual revenue between $2 million and $100 million, to apply for long-term equity capital investment of between $5 million and $15 million.
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has applauded the news, calling it a win for business.
“Today’s launch of the Australian Business Growth Fund is fantastic news for high growth potential SMEs who require essential long-term equity finance to flourish,” Ms Carnell said.
“The fund will fill the critical gap, identified in our Affordable Capital for SME Growth report, for patient capital to enable our up-and-coming SMEs to succeed.
“While businesses need to demonstrate three years of revenue growth and profitability, there are allowances in place for the impact of the COVID crisis on recent business performance."
According to Ms Carnell, the fund has appointed Anthony Healy as CEO and Will Hodgman as chairman and will be managed by private sector expertise.
“Minority shareholding of between 10 per cent and 40 per cent will enable these promising businesses to retain control of their company, while providing the funds they need to invest in growth," said Ms Carnell.
“Similar models in the UK and Canada are tried and tested – overcoming barriers to accessing affordable capital for businesses that have gone on to demonstrate successful growth.
“We welcome both the federal government investment in the fund, along with the major banks and financial institutions’ contribution."
The Australian Business Growth Fund is valued at $540 million, but with the capacity to grow to $1 billion as it matures.
“In supporting our high growth potential SMEs, the Australian Business Growth Fund will play a significant role in encouraging business growth and economic recovery at a time when we need it most," Ms Carnell concluded.