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Self-Funded Superannuation Small Business Loans

Here’s a question. Why is it that an Australian small business can’t utilise a one-time interest free loan of $20,000 from their superannuation scheme? I mean, in cases where they apply, prove the merits of their idea and earn that loan in a similar way to existing loan applications.

OK it’s a loose idea shot directly from my empty pocket. And, before you ask, I’m one of the many Australians who doesn’t even have that amount in my superannuation. But it’s not a bad idea when you think about it.

On the plus side it would release a staggering amount of cash back into the economy; it would empower bootstrapping entrepreneurs a one-time access to limited interest free finance; it would offer potential stimulation to Australian innovation, and it would offer a one-time limited finance opportunity to a business on the brink of cash flow failure (where it can be proven otherwise a viable enterprise) or fund equipment upgrade or expansion.

On the negative side, a one-time loss out of superannuation isn’t really the end of the world. The amount of successes, given an adequate application and assessment regime, should far outweigh the number of losses.

Anyway, it’s just an idea. If we really want small business to thrive we should be doing our utmost to empower their resource profiles so they can achieve realistic goals and objectives. And, after all, it’s their money.

It is much better that a business be empowered by their own funds – which may or may not be returned into the superannuation fund given a determined criteria – than to approach banks and other finance providers to charge interest. For one, their own money won’t call that debt in at the worst possible time. It’s a relatively safe loan from a business owner to themselves. It can also be granted with a slightly higher risk of failure.

Let’s say this scheme has a one-time non-refundable $200 application and assessment fee. Let’s say State Govt reaches into its coffers to make that system sustainable. And let’s say, just for the hell of it, a condition of the loan is that it’s given (like the NILS Scheme) not in cash but in direct payment for the needed product or service or outstanding debts.

It has to be a better idea than watching small businesses fail due to lack of wind in their sails or letting them nose dive into the gravel. The idea is to create a no-interest loan scheme to help people help themselves up. Not a scheme for another hand-out. Think about that for a moment. It’s not that unreasonable. In fact, if it can get start-ups off the ground it’s a crying shame this isn’t any political party’s policy. Unless I haven’t heard of it yet.

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Steven Clark Steven Clark - the stand up guy on this site

My name is Steven Clark and I live in the Derwent Valley in Southern Tasmania. I have an MBA (Specialisation) and a Bachelor of Computing from the University of Tasmania. I'm a mazer & a yeast farmer (making beer, fruit wine and mead as by-products of continuous improvement in my farming practices). I'm a photographer, although my film cameras are currently silent. I do not tolerate idiots. I do not tolerate bigotry. I do not tolerate excuses. Let's be clear, if you sit with my enemies you my are my enemy for life.

Blogger. Thinker. Brewer. Drinker. Life partner to the amazing and incredible Megan.

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