Westpac: Change required to address emerging business funding needs

Emerging Australian businesses and industries are being held back when it comes securing the business funding they need to grow.

At least, that’s according to the latest Smart Industry Report on Emerging Industries from Westpac.

The report revealed that businesses in a number of emerging fields, including those ‘driving’ the move towards a digital and low carbon Australian economy, often lack the financial support provided to similar innovators in other countries.

Westpac highlighted the maturity of the capital market in Australia, as well as issues with regulation and government as being the major roadblocks startups and entrepreneurs face when accessing finance.

RELATED: Small business loans made simpler in 2019 as online lenders adopt new code

According to Reeta Dhar, Westpac’s National Head of Emerging Industries, the bank is determined to help plug the funding gap though.

“Westpac wants to back the businesses that are backing Australia, which is why we are the first bank in Australia to set up a network of specialist bankers dedicated to emerging industries, and a risk appetite to provide debt funding to scale-up businesses,” she said in a statement last week.

“We are committed to understanding the strategies, technologies and business models of these transformative companies and are unlocking a range of services that allow them to extend their operating runway, including access to debt.”

Could government small business strategy help Australian innovators?

Announced in November last year, the Federal Government’s two-pronged SME funding strategy could go some way to assisting small and emerging businesses with securing better value loans.

The first prong - a $2 billion Australian Small Business Securitisation Fund - aims to provide small banks and online lenders with the ability to significantly boost their funding levels, which would then be passed on to small businesses by way of more competitive business loans.

Secondly, the Government also floated plans to establish an Australia Small Business Growth Fund backed by banks and superannuation funds.

Inspired by the UK’s own Business Growth Fund, the Australian fund would provide longer term equity funding to small businesses - something many businesses find difficult to acquire without taking on debt.

RELATED: $2 billion small business boost: Coalition announces two-pronged funding strategy 

While neither strategy currently has a concrete implementation date, the Department of the Treasury states that legislation to introduce the Australian Small Business Securitisation Fund is likely to be introduced in the earlier stages of 2019.

Until then, if you’re looking for a funding solution for your own business why not start by checking out some of the great business loan offers below. Or if you’d like to see even more, head over to Mozo’s Business Loans Comparison Hub to compare a range of offers from both banks and online lenders.

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