Banker Anthony Healy has been appointed to run the Australian Business Growth Fund, a government and business partnership set up to provide equity funding for small and medium enterprises.

Treasurer Josh Frydenberg confirmed on Friday that the government will investment A$100 million in the fund and that the major banks have each committed $100 million.

HSBC Bank Australia and Macquarie group have committed $20 million each. Frydenberg said he hoped to grow the fund to $1 billion.

Healy is moving from NAB subsidiary JB Were, where he was chair for the past two years. Prior to that, he was the chief customer officer in business and private banking at NAB and chief executive of Bank of New Zealand.

Businesses will be able to apply for equity funding of between $5 million and $15 million, where they have generated annual revenue of between $2 million and $10 million and can demonstrate three years of consistent revenue growth and profitability (allowing for the impact of the COVID-19 recession).

The fund will take equity of between 10 and 40 per cent of investee companies, ensuring that the business owners retain control.

The fund will operate commercially and make investment decisions independently of government. Its chair is former Tasmanian Premier Will Hodgman.

The explanatory memorandum accompanying the Australian Business Growth Fund Act says the relevant minister must ensure that the fund does not become a Commonwealth company, that the Commonwealth does not control the composition of the board and is not in a position to cast more than half the votes at a general meeting.

The legislation requires that the fund be reviewed after three years.