– Australian Treasurer Josh Frydenberg has announced 2 billion Australian dollars (1.4 billion U.S. dollars) in funding to lower the cost of borrowing for small businesses.
Frydenberg said the government would establish the Australian Business Securitisation Fund (ABSF) with the aim of injecting more money into the small business sector that employs 7 million Australians.
The initiative will be a key pillar of the governing Liberal-National Party coalition (LNP)’s pitch to small businesses ahead of the 2019 general election, having already passed tax cuts for companies with an annual turnover lower than 50 million Australian dollars (36.1 million U.S. dollars).
“Small businesses find it difficult to obtain finance other than on a secured basis – typically, against real estate,” Frydenberg said in a statement on Wednesday.
“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.”
“To overcome this and ensure that small businesses are able to fulfill their potential and continue to underpin economic growth and employment, the ABSF will invest… in the securitization market, providing significant additional funding to smaller banks and non-bank lenders to on-lend to small businesses on more competitive terms.”
In addition to launching the ABSF, the treasurer on Wednesday announced that regulations would be overhauled to encourage banks to put money into a growth fund, the Australian Business Growth Fund, to support small employers.