(12 November 2024 – Australia) The new Australian Business Growth Fund (ABGF) report Powering the Growth Economy highlights the size and impact of Growth Economy businesses, rising demand for equity funding and potential economic gains if the funding gap is addressed.
Representing only six percent of all businesses, Australia’s Growth Economy powers our nation’s prosperity, driving 42 percent of employment, 47 percent of R&D and contributing 26 percent of GDP.
Yet, a A$38 billion equity funding gap holds back their growth.
Based on interviews conducted by East & Partners with 3,500 small and medium-sized enterprises (SMEs) and economic modelling, the report reveals how institutional capital often bypasses Growth Economy businesses – those with A$2m to A$100m revenue – leaving them underfunded and reliant on debt or personal networks.
“This report offers the most comprehensive view of Australia’s Growth Economy. These businesses are vital to our economy and sovereign capabilities. With the right level and type of equity funding, we can unlock a new wave of investment and long-term prosperity” commented ABGF CEO & Managing Director, Anthony Healy.
Jack Quail reports for The Australian Mr Healy’s view on how to spur much-needed funding into small businesses that traditionally struggle to access capital.
Growth in promising SMEs could be turbocharged if tax benefits for investors were broadened according to the ABGF.
“Tax incentives have tended to turbocharge capital investment and I’d be encouraging the government to consider similar incentives for this space. Institutional capital doesn’t just bring capital, it brings expertise, connections and networks. The importance of bringing this market is critical, and government incentives are one way to do that” Mr Healy added.
The ABGF is a public-private partnership between the major banks and federal government that takes equity stakes in SMEs that need a capital injection to grow their operations.