Small and medium-sized businesses may soon be able to borrow money on more competitive terms, under a $2 billion federal government plan to boost the funds available to smaller lenders.
The money will be injected into the small banks and non-bank lending market in the coming years through a new Australian Business Securitisation Fund.
The taxpayer-backed fund will buy packages, or securitisations, of secured and unsecured loans issued by those lenders, thereby giving them more money to lend out - at potentially lower interest rates.
The initiative will mean more competition in the business loans market, currently dominated by the big banks which account for the more than 80 per cent of loans that are less than $2 million.
