A neobank dedicated to small and medium-sized businesses has become the first lender to participate in the government’s $2bn SME funding scheme.
Judo Bank last week announced an intended investment of $500m into its lending warehouse, in a bid to make additional funding directly available to businesses struggling under the economic weight of the COVID-19 pandemic.
“At a time when the availability of credit has never been more important to tens of thousands of Australian SMEs, Judo is delighted to be able to announce such a substantial investment by the Australian Office of Financial Management (AOFM),” said Judo Bank co-founder and co-CEO, David Hornery.
“The relationship banking model sits at the heart of the Judo story, and it is at times like these, that the provision of that one on one support and advice, alongside the extension of funding really comes to the fore.”
The $500m is expected to come through two avenues; the AOFM will be investing an initial $250m into the Judo lending warehouse, with a further $250m expected to be invested through the federal government’s recently announced $15bn Structured Finance Support Fund.
“The investments by the ABSF and the SFSF, which have been set up by the federal government to provide funding to SME lenders, and in turn to the SME community, are particularly timely,” said Hornery.
“They will have a direct and positive impact on small and medium-sized enterprises nationally.”
Greg Moshal, CEO of small business lender Prospa, was “impressed” with the speed of the government’s response.
“Their support for Judo demonstrates just how important [alternative] lenders are to maintaining efficient flow of capital to small business across Australia,” he explained.
“It is also vital for ensuring that small business lending remains competitive, not just over the coming months, but also as we emerge from this crisis and work towards rebuilding a strong and healthy economy.”