The Australian Office of Financial Management has reactivated its Australian Business Securitisation Fund, putting out an invitation to submit investment proposals.

The ABSF was launched in July 2019, with funding to invest in securities issued by warehouses and special purpose vehicles established by small business lenders.

Its aim is to support the provision of credit to the SME market and help make the SME lending sector more competitive.

It is a separate initiative from the Structured Finance Support Fund, which was set up last year as part of the government’s COVID response to support the term securitisation programs of small lenders.

In April last year the ABSF made its first investment, buying securities issued by a warehouse vehicle sponsored by Judo Bank.

But in July it put the program on hold, citing challenging conditions in the securitisation market and delays in creating a data template for the scheme.

Now the AOFM is getting the program going again. On Friday it invited market participants to submit proposals for investment by the fund, with a March 31 deadline for submissions.

It said draft term sheets should include details of the portfolio parameters and asset eligibility criteria of underlying loans.

The AOFM said the Australian Securitisation Forum has reconvened a working group that is developing a standardised SME loan-level data template.

“While not a precondition for recommencing ABSF activity, industry re-engagement with this market development activity remains key to achieving the objectives of the ABSF,”  it said.