The fund should make it easier if you’re struggling to get finance for your business.
The government recently announced plans to inject $2 billion into the small business lending market to help small- to medium-enterprises (SMEs) that are struggling to get capital.
The policy is called the Australian Business Securitisation Fund and will be introduced to address the ongoing credit squeeze for small businesses looking for funding.
Read our guide below to see how it could help your business.
What is the Australian Business Securitisation Fund?
It’s a taxpayer-backed fund that aims to increase competition in SME lending by boosting alternative lenders. It will be administered by the Australian Office of Financial Management.
How does it work?
The securitisation fund will purchase secured and unsecured loan packages from smaller banks and non-bank lenders, which can then use the funding to lend to SMEs and potentially lower borrowing costs for small business owners.
The big four banks currently account for over 80% of small business lending and often charge more on rates compared to non-bank lenders. The fund aims to level the playing field between traditional and alternative lenders and make it easier for owners to secure a loan.
How can I apply?
There is currently no official word on when or how SMEs can apply for or use the fund. We will keep updating this guide as more information is announced.
In the meantime, if you're considering a loan from a non-bank lender, read our guide to alternative bank loans.
What are my other options?
If your business needs funding soon and can't wait for the launch of the fund, you can compare fast small business loans now.
You can also prepare for the launch by reading our guide to how business loans work.