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Hodgman Bags Top Job at new Business Growth Fund
The federal Treasurer has appointed former Tasmanian leader Will Hodgman to be the inaugural chair of the $540 million Australian Business Growth Fund.
The purpose of the fund is to give small and medium enterprises access to so-called patient capital investors.
The fund has access to $100 million of federal funding, with the four big banks each contributing the same amount and HSBC and Macquarie Group putting in $20 million apiece.
“His leadership and experience makes him the ideal candidate for the chair of the BGF,” Treasurer Josh Frydenberg announced.
The stated aim of the fund is to provide longer term equity funding to small businesses.
“Many small businesses find it difficult to attract passive equity investment which enables them to grow without taking on additional debt or giving up control of their business,” a Treasury statement says.
The fund was officially launched by Treasury at the Australian Chamber of Commerce and Industry on 27 November. The pledged bank funding will be provided over a five-year period.
The government is aiming for the fund to grow to $1 billion as it matures.
Will Hodgman is yet to comment publicly on the appointment
Objectives
The main reasons for the funding are:
- Security –businesses find it difficult to obtain finance other than on a secured basis – typically, against real estate.
- Additional Funding – 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.
- Funding Costs – even when small businesses can access finance, funding costs are higher than they need to be
- Control – Many small businesses find it difficult to attract passive equity investment which enables them to grow without taking on additional debt or giving up control of their business.
