Consultation on $2 billion SME securitisation fund

Australian small businesses are a step closer to getting better access to more competitive finance, with the Liberal National Government releasing exposure draft legislation on the establishment of the $2 billion Australian Business Securitisation Fund for consultation.

This consultation is the next step in ensuring that small and medium businesses have access to the finance they need to fulfill their potential and continue to underpin economic growth and employment.

Small businesses find it difficult to obtain finance other than on a secured basis – typically, against real estate. Small businesses that have already obtained finance secured against real estate, but wish to continue to grow, also find it difficult to access additional funding. Even when small businesses can access finance, funding costs are higher than they need to be.

To overcome this, the Australian Business Securitisation Fund will invest up to $2 billion in the securitisation market, providing significant additional funding to smaller banks and non-bank lenders to on-lend to small businesses on more competitive terms.

The Fund will be administered by the Australian Office of Financial Management (AOFM), consistent with their prior involvement in the Residential Mortgage Backed Securities Market in 2008.

With more than three million small businesses employing around seven million Australians, enhancing small business access to funding is part of the Liberal National Government’s plan for a stronger economy.

The consultation closes on 16 January 2019 and is available on the Treasury website.

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