Previously Brett Craig of Aura Group outlined the opportunity to generate attractive income in the alternative asset class of SME debt capital. Of course, in strained economic times like today, investors would rightly be asking whether SME financing is a risky proposition. But SMEs are not a homogenous group and given they employ just under 70% of the Australian workforce, there continues to be significant backing from government.

“Interestingly our arrears have dropped in the last three months … what we’re seeing is adaptation from lenders where the focus has shifted from new loan origination into management of the existing portfolio.”

Here Brett discusses how his process has adapted to the changing environment, what government stimulus has meant for SMEs and what to expect when measures like JobKeeper are wound back.

The Aura High Yield SME Fund aims to provide stable monthly income from a diversified portfolio of debt securities, principally issued by lenders to SME businesses in Australia. Find out more here

Shane Shi

Brett, does your portfolio benefit or is any way adversely affected by the Coronavirus SME Guarantee Scheme?

Brett Craig

Hi Shane, the portfolio benefits from the scheme with respect to the coverage provided on eligible loans.