IPA calls for loan guarantee scheme
The Institute of Public Accountants (IPA) is urging the Federal Government to introduce a State-backed loan guarantee scheme for small business.
“Australia is one of the only countries in the developed world without such a scheme,” said IPA chief executive officer, Andrew Conway.
“A loan guarantee scheme would help increase the availability of much-needed, affordable loan finance to the small business sector.
“According to research undertaken by the IPA Deakin University SME Research Partnership, on average, 28,000 Australian businesses per annum face a binding finance constraint, whilst 118,000 face some access to finance issues.
“A limited state-backed guarantee would encourage banks and other commercial lenders to increase loan finance available to small business.
“Access to responsible and affordable finance will help many small businesses reinvest in their businesses and help create new ideas, new capacity and new jobs.
“We appreciate that the scale of a potential program needs to be established in a detailed feasibility study as this determines the scale of the initial and ongoing demands on the Treasury,” said Mr Conway.
The IPA’s recommendation for the small business loan guarantee scheme forms part of the IPA’s pre-Budget submission for 2015-16. For the IPA’s complete pre-Budget submission go to /2015budget