Legislation introduced to establish the Business Growth Fund

Treasurer Josh Frydenberg and Senator Michaelia Cash announced in a joint statement that the government is committing $100 million in funding to establish the BGF and partnering with other financial institutions to provide equity funding to SMEs.

The major banks, including ANZ, CBA, NAB, and Westpac, have each agreed to commit $100 million to the BGF, wile 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.

Under the BGF, established Australian businesses will be eligible for long-term equity capital investments between $5 million and $15 million. The fund’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 Australian Small Business and Family Enterprise Ombudsman Kate Carnell welcomed the new legislation introduced by the federal government, explaining that it will allow high growth SMEs to flourish.

“This initiative comes at a time when many respected economists, including those at the Council of Financial Regulators, are expressing concerns about the difficulties Australian SMEs face in accessing finance.

“The Australian Business Growth Fund will significantly encourage business growth and promote economic expansion," Ms Carnell said.