The Andrews government has pledged $250 million dollars to establish the Victorian Business Growth Fund for the state’s small and medium-sized businesses. The aim of the fund is to provide SMEs with access to capital to create jobs to grow the Victorian economy.
The Morrison government has announced an additional $50 million contribution to the fund which will be developed with leading industry superannuation groups First State Super and VicSuper.
It is hoped the fund will assist in creating 1000s of new jobs within Victoria’s small business sector by eliminating some of the existing financial barriers that are inhibiting small business growth.
The Labor Government, First State Super and VicSuper are continuing to work together to finalise the design of the fund, which is subject to a formal agreement.
The Reserve Bank and the Small Business and Family Enterprise Ombudsman have repeatedly noted that the economy is being held back by a lack of access to finance.
With this in mind, Treasurer Tim Pallas hopes the fund will stimulate business growth.
“The Victorian Business Growth Fund will give some of our best small and medium-sized businesses the incentive to take on new ventures and employ more Victorians,” he said.
The Fund will complement the Labor Government’s existing programs which already support businesses, such as the Victorian Jobs and Investment Fund and payroll tax cuts announced in the Victorian Budget 2019/20.
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed the announcement.
I’m supportive of any initiative that gives SME operators access to funding at a time when they are being heavily impacted by tightening requirements by lenders,” Carnell said.
“We know that the biggest barrier to SME growth is access to finance.”
Carnell said while the design of the fund is yet to be finalised, she hoped it would focus on providing long term funding solutions for SMEs.
“Ideally, the fund would allow SMEs to access amounts between $250,000 and $5 million, with terms up to seven years,” she said.
The Victorian Minister for Small Business Adem Somyurek said the fund will help “break down the barriers small businesses face in obtaining the capital they need to grow.”