Australian Business Growth Fund (ABGF)
The ABGF is an independent initiative designed to provide equity support to growing Australian-owned trading businesses.
Established in 2020, the fund comprises seed investment of $540M from the four major banks plus Macquarie and HSBC.
In essence, the fund provides a bridge between senior debt and late-stage venture capital. It is ideal for businesses that need expansion capital beyond responsible debt ceilings, but want support that is not overly intrusive or expensive to access.
The fund mirrors successful overseas models to provide support for entrepreneurial and innovation activity in Australia.
The parameters for investment are relatively broad and industry agnostic, with key criteria that includes:
The ABGF operates in a minority equity capacity, that includes:
After submitting an application, the full investment process takes 8-10 weeks. The focus is on supporting active trading businesses, and excludes straight asset investment or speculative ventures (e.g. real estate, mining, etc).
For the business owners, there is a very material cost in terms of relinquishing a portion of equity in a successful business. Most owners will not enter into this position lightly and will consider the opportunity cost of continuing on with other sources of capital.
This said, there are some attractive potential benefits that include:
Since its launch in 2020, there have been several transactions completed, and the fund has an appetite for more opportunities. Businesses have accessed the fund to expand operations overseas, launch new products, finance acquisitions, and as part of proactive succession planning. Success Stories and additional data are available on the ABGF website.
Our range of digital Business Guides may offer support for businesses considering the scheme of other commercial finance options.