SMEs receive $250m support package
The Treasurer, Josh Frydenberg, and the Australian Office for Financial Management have announced measures to support the small and medium-sized business (SMEs) sector with a $250 million package.
The funding from the Australian Business Securitisation Fund would enable smaller lenders to continue supporting SMEs by investing $250 million into securities issued by a warehouse facility to support lending to SMEs.
This would fund a portfolio of loans for up to four years to assist with deepening the market for SME asset-backed securities.
This type of lending was ‘critical’ to Australian markets in creating competition, Frydenberg said.
“Small lenders are critical to Australia’s lending markets in creating more competition, especially for SME’s, during the current coronavirus crisis.
“The Government will continue to do what it takes to ensure that Australia bounces back stronger.”
It complemented existing measures for SMEs such as:
- $15 billion to allow AOFM to invest in wholesale funding markets used by small authorised deposit-taking institutions (ADIs) and non-ADI lenders. The AOFM made its first investment under this program on 27 March, purchasing residential mortgage‑backed securities valued at $189 million;
- The SME Guarantee Scheme to support up to $40 billion of lending to SMEs. Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders; and
- The RBA’s $90 billion term funding facility for ADIs with a priority for SME lending.
AUTHOR
Laura Dew
Recommended for you
An adviser has received a written reprimand from the Financial Services and Credit Panel after failing to meet his CPD requirements, the panel’s first action since June.
AMP has reported a 61 per cent rise in inflows to its platform, with net cash flow passing $1 billion for the quarter, but superannuation fell back into outflows.
Those large AFSLs are among the groups experiencing the most adviser growth, indicating they are ready to expand following a period of transition and stabilisation after the Hayne royal commission.
The industry can expect to see more partnerships in the retirement income space in the future, enabling firms to progress their innovation, according to a panel.
