Aura Private Credit: Letter to investors 26 September 2022

The Reserve Bank of Australia has released a renewed paper reviewing how small to medium enterprises (SMEs) access funding. This report comes off the back of a July meeting with the Small Business Finance Advisory Panel, providing an update on the current state of the SME finance market.

This week, we have prepared a short report providing insights on how the RBA’s findings reinforce the thesis of the Aura High Yield SME Fund.

Product offerings to small businesses from banks no longer suit the requirements of small businesses and their owners. This can be traced back to a shift in the regulatory treatment of small business loans. Inevitably, this shift led to a funding gap in the SME sector, estimated at approximtely $213.6 billion according to the 2021 Judo SME Banking Insights Report.

We focus on funding Australian businesses because they employ over 70% of the Australian workforce. In our view, there are several foregone opportunities within the Australian SME lending market due to a lack of capital availability.

Read the report: Reinforcement of the Aura High Yield SME Fund thesis


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