Growth fund offers SMEs capital to scale

Small to medium-sized businesses seeking growth capital to scale are being encouraged to consider applying for investment from the Federal Government-backed Australian Business Growth Fund (ABGF).

ABGF was established as a public-private partnership between the Federal Government and six leading banks, purpose-built to back SME businesses to pursue growth activities.

Founded with an initial capital of $540 million, the fund’s aim is to “fill a critical gap in the market for flexible growth capital that’s tailored to each individual business”.

Funding ranges between $5-$15m for “growth-ready businesses” with revenue of over $2m, with ABGF taking a minority stake of up to 49 per cent.

EXPLAINED: How to get ready for an external investor

“Our investment can facilitate expansion into new markets, new product development, mergers and acquisitions and succession planning,” ABGF CEO Anthony Healy said.

Healy said the eight-10-week investment process included:

  • an application;
  • an exploration into the business, where it’s headed, and how ABGF’s capital and expertise can accelerate growth:
  • term sheet and due diligence; and
  • approval (if successful).

“We carefully develop a roadmap for the future that prioritises getting your business the maximum benefit from ABGF backing,” Healy said.

“Once we partner, we’ll work with you to assemble a Board (if necessary), and appoint an independent chairperson to deliver on the growth plan. The fund will also take a seat on the board to enable full visibility of the business so we can actively be involved in helping the business fulfill its strategy.”

LEARN MORE: Four ways growth capital can accelerate your business 

During the partnership, further investments can be proposed and assessed on individual merit.

ABGF offers patient, not permanent capital, and ensures complete alignment on exit expectations.

For more go to abgf.com.au

ABGF case study — Scipher 

WA e-waste recycling business Total Green Recycling (TGR) has benefited from investment from the Australian Business Growth Fund (ABGF) as part of a deal with east coast company, Scipher. 

TGR Co-Founder James Coghill.

With ABGF’s investment, and backing from the Clean Energy Finance Corporation, Scipher will expand its Australian operating footprint and further invest in innovative and advanced technologies to optimise its raw material and commodity recovery capabilities. 

This includes the addition of TGR to the Scipher group, and plans to establish new recycling plants in Sydney and regional NSW.  

TGR Co-Founder James Coghill said the ABGF & CEFC investment enabled Scipher and TGR to create an east-west business combination. 

“This business combination enables both businesses to focus on national partnerships with large corporates, retailers and electronic manufacturers,” he said. “More importantly it helps facilitate scaled investment into value-add infrastructure, such as solar and advanced plastic recovery (which are not viable unless you have sufficient feedstock).” 

Scipher will take a ‘first-mover’ position in both these exciting new recycling arenas. 

ABGF’s Co-Head of Investments, Patrick Verlaine, said: “Regulators, businesses and consumers are increasingly focused on the treatment of e-waste,” he says. “Through this investment, we are supporting a growing business that is focused on investing in leading technology to maximise recovery rates of valuable products that would otherwise be diverted to landfill as environmentally harmful waste. We are delighted to be investing in and working alongside such an experienced and industry-leading management team.”  

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