The Australian Business Securitisation Fund has made its latest investment, committing A$225 million to a warehouse facility sponsored by SME lender Dynamoney (formerly Grow Finance). The ABSF said it has given in-principle approval for the funding, subject to completion of commercial negotiations and documentation. The ABSF also reported that it has exited its initial investment - $250 million funding of Judo Bank in March 2020. Its other current commitments include an $87.5 million investment in Get Capital, a $30 million investment in OnDeck and a $65 million investment in Prospa. The ABSF, which is which is administered by the Australian Office of Financial Management, was established to improve lending market conditions for SMEs by facilitating the development of the securitisation market for SME lenders.  The government committed $2 billion over four years to invest in securities issued by warehouses and special purpose vehicles established by small business lenders. The last tranche of that funding was provided in July last year. Its current investments, including the yet to be completed Dynamoney transaction, add up to $407.5 million. Banking Day asked last year why so little of the ABSF’s funding allocation has been invested. An AOFM spokesperson said: “The special account balance represents an upper limit on ABSF investments, not a target. The AOFM continues to receive proposals. Not all proposals are both within the ABSF’s mandate and consistent with the ABSF’s market development objectives. “For private warehouse transactions, the due diligence process can take several months.” In a review of the ABSF, Treasury noted that the comparability, consistency and availability of residential mortgage data is one reason for the strength of the Australian residential mortgage-backed securities market, but there was no equivalent reporting standard for SME loans. SME lending can be complex because there are different legal entities, sometimes in the one business, and there may be multiple collateral items for one loan. The AOFM has worked with the Australian Securitisation Forum to develop a standardised reporting template for SME loans. In its latest update, the AOFM said a number of market participants have adopted the reporting template. “Incentivising the establishment of a track record for new kinds of SME lending in a standardised format remains a key part of the AOFM’s strategy to support the development of the securitisation market,” it said.