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Let down by bonds? Private debt is worth a look

For all the doom and gloom being proffered by various analysts it might surprise you to learn the Australian economy is actually growing. And it grew 2.7 per cent over the last year. Sure, the rate of growth might be slowing, but we’re still growing.

And if you consider all the job vacancy signs posted on every second retailer and restaurant window, you’d be forgiven for thinking we’d be growing a lot faster if those positions were filled.

Many Australian businesses – those SMEs representing Australia’s growth engine – could be growing a lot faster if it wasn’t for a lack of staff or capital.

And it’s capital that has been pulled at precisely the time those businesses need it most. Remember, the big banks employ those same strategists and commentators who are worried about recessions. 

When banks are worried about recessions, they pull back on lending – producing the very outcome they seek to avoid.

And when banks do lend, they often take longer to approve a loan than the period the business needs the funding. There’s a remarkable number of businesses needing smaller loans for short periods of time.

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