Judo Bank lands $307m from government to support SMEs
Judo, a challenger bank which lends to Australian small and medium enterprises (SMEs), has landed AUD 500 million ($307 million) in funding from the country’s government as companies face uncertainty over coronavirus.
The Australian Office of Financial Management (AOFM) has invested half the capital through the Treasurer’s Australian Business Securitisation Fund (ABSF), and the other AUD 250 million comes from the government’s AUD 15 billion Structured Finance Support Fund (SFSF).
“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 AOFM,” says Judo’s co-founder and co-CEO David Hornery.
The AOFM’s investment in Judo makes the challenger bank the first recipient of capital from the government’s AUD 2 billion SME funding scheme, which was unveiled in November 2018 and comes from Commonwealth bonds.
Initially designed to strengthen competition between the country’s big four banks and offer more loan options to SMEs, the scheme now has the added result of helping businesses stay afloat during the global pandemic, which is only just starting to take hold of Australia.
The government later established the AUD 15 billion SFSF, which was specifically designed to ensure continued access to funding markets during the coronavirus.
“The government has made a whole series of substantial and targeted interventions in the market,” Judo’s co-CEO Hornery tells the The Sydney Monring Herald. “This is a really substantial additional signal of support by the government of the sector.”
Hornery says the bank has built its deposit book to almost AUD 1.4 billion ($860 million), and earlier this month the challenger landed a AUD 350 million ($215 million) line of credit from Citi.