All big four sign on to government’s $500m SME growth fund
(5 November 2019 – Australia) The big four domestic banks along with HSBC and the government will jointly invest $500 million into fast-growing SMEs in an effort to improve their community reputations.
After initially declining to join the public-private business growth fund, ANZ is now planning to sign on with NAB, CBA, Westpac and HSBC as founding members of the Australian Business Growth Fund.
The government and big four banks are expected to contribute $100 million each as seed capital to secure a board seat at the new fund, with HSBC chipping in a smaller amount.
The fund will provide long-term equity to 350 firms a year with annual turnovers between $2 million and $50 million, which are typically beyond the start-up stage.
The prudential regulator is offering regulatory capital relief to the planned fund, in line with similar schemes in Canada and the United Kingdom.
Treasurer Josh Frydenberg said the fund would operate commercially and independent of the government, based on private sector finance models.
The Australian Business Growth Fund will have an independent chair and a minority of independent directors, with participating bank shareholders also due to get a board seat.
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