SMALL BUSINESS FINANCE GUARANTEE: A MUST HAVE
The Institute of Public Accountants (IPA) has welcomed the inclusion of a key recommendation from its Australian Small Business White Paper in the Leader of the Opposition’s Budget Reply.
The IPA recommends that the Federal Government should introduce a State-backed loan guarantee scheme for small business.
“It is pleasing to see that such a scheme is being contemplated by the Opposition in its 2015 budget response,” said IPA chief executive officer, Andrew Conway.
“Australia is one of the only countries in the developed world without such a scheme.
“In our view, 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 at affordable rates.
“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 parameters of the initial and ongoing demands on the Government,” said Mr Conway.