The Australian Business Securitisation Fund (ABSF) will invest up to $2 billion in warehousing and the securitisation market, providing significant additional funding to smaller banks and non-bank lenders to on-lend to small businesses on more competitive terms. It will be administered by the Australian Office of Financial Management (AOFM).
Through the ABSF, AOFM will:
- fund new and existing warehouse facilities for SME loans alongside the private sector; and
- buy and hold securitised SME loans in order to support segments of the market where there are identifiable gaps.
The Government announced the ABSF on 14 November 2018.
Legislation will be introduced to implement the fund in early 2019, and its investment mandate and priority areas will be informed by extensive stakeholder consultation.
Operation of the fund
The AOFM will make targeted investments in securities issued by warehouses, alongside private sector investors. These warehouses provide funding to smaller banks and non-bank lenders for loans extended to small businesses.
Interested parties can contact ABSF@treasury.gov.au for further details.