Could a US-style loan program save thousands of Australian businesses from closure as their owners retire?
What happens: Coraggio, who represents private business owners, is pushing the federal government to introduce a US-style loan guarantee scheme to help buyers acquire existing businesses as hundreds of thousands of older owners prepare for retirement, with 22% of small business owners now aged 60 or over.
Why this is important: Without follow-on support, many viable businesses will close rather than transition to new owners, causing significant economic disruption and potentially leaving regional communities without essential services, while private equity steps in to consolidate struggling sectors at low prices.
Australia is facing a succession crisis that could see hundreds of thousands of small businesses disappear within the next decade, prompting calls for government intervention to prevent widespread economic damage.
Coraggio, one of Australia’s largest private business owner groups, has called on the federal government to introduce a loan guarantee scheme modeled on the US Small Business Administration.
The American system, which has been in operation since 1953, helps entrepreneurs acquire businesses through government-backed loans. In 2024 alone, SBA loan programs supported more than $56 billion in financing, supporting more than 103,000 small businesses with loans that enabled up to 90% loan-to-value ratios and historically low default rates. The approach reduces barriers for buyers looking to acquire established businesses, which typically pose less risk than start-ups due to existing cash flow, customer bases and financials.
Silver tsunami approaching
The urgency stems from demographic shifts within Australia’s small business sector. According to the Australian Small Business and Family Enterprise Ombudsman’s Small Business Matters report, 22% of Australian small business owners are aged 60 or over. The report also shows that nearly half of all small business owners are over 50, while only 8% are under 30, which is half the peak of 17% reached in the mid-1970s.
Coraggio CEO Richard Skarzynski said the guarantee should go beyond just providing loans and include education programs for successful applicants.
“Offering these types of loan structures is essential for business transition, but there is no point in offering this mechanism to enable generational business takeover if these new owners do not have the skills to maintain and grow the business,” Skarzynski said.
“Business owners want to be assured that the business they have built, likely over many decades, will be in good hands.”
Learning from America
The proposal has received support beyond Coraggio’s membership. Queensland accountant Chris Davey recently established petition EN7615 calling for a government-backed business loan guarantee scheme, which has already attracted 1,274 signatures before the closing date of September 26, 2025.
The petition calls on the Federal Government to introduce a scheme that includes up to 80% loan-to-value lending for approved acquisitions, a government guarantee to reduce lender risk, streamlined application processes through participating banks and specific support for women, Indigenous Australians and regional entrepreneurs.
Davey’s petition draws parallels with existing government support in the residential sector, noting that Australia offers loan guarantees through the Home Guarantee Scheme, allowing first home buyers to avoid paying Lenders Mortgage Insurance with as little as a 5% deposit.
The petition also highlights the economic returns the US model generates, noting that for every million dollars lent, 3 to 3.5 jobs are created within three years.
Skarzynski emphasized that succession planning cannot rely solely on family transfers.
“That means the new owner will need to be surrounded by a strong advisory board of business colleagues to ensure that the funding is well spent on further growing these businesses, realizing the new owners’ dreams and building the economy,” he said.
“It’s a low-cost mechanism, and with this educational attachment it becomes a low-risk, low-cost investment for the government that yields the greatest returns. It’s the fastest and cheapest way to grow the economy.”
Regional risk
The impacts extend beyond metropolitan centres, with regional and rural areas facing particular vulnerability. Skarzynski warned that many older owners run small businesses in these areas, and their departure without successors could deprive cities of essential services and economic stability.
He also highlighted alternative outcomes if succession issues remain unresolved.
“If these small companies can’t be acquired, they will either close down and disappear, or private equity funds will come in, pay very little for them and roll them up into a national corporation and raise prices for the industry, which is their wages,” Skarzynski said.
Skills are also important
The demographic shift has accelerated in recent decades. The Small Business Matters report shows that the most common age of small business owners is now 50, up from 45 in 2006. In the 1980s, there were twice as many small business owners between the ages of 30 and 49 as there were over 50.
Younger buyers often struggle to secure traditional bank loans to purchase businesses, even if those businesses demonstrate solid financial performance and market position. The proposed guarantee scheme would reduce lender risk and open up opportunities for enterprising buyers who lack substantial collateral.
“We need to value self-employment. Yes, it can be tough, but it can also be very rewarding with the right advice, both financially and personally,” Skarzynski said.
The federal government has not yet responded to Coraggio’s proposal or to the public petition. The Australian government currently offers a free succession plan template to help entrepreneurs prepare their exit strategies, but financial support mechanisms for buyers remain limited compared to the US model.
As succession planning experts note, the process is not just about naming a successor, but also about protecting and strengthening a company’s foundations. Without comprehensive government-backed credit support, advocates argue Australia risks losing not just individual businesses, but entire sectors of the entrepreneurial economy.
The petition can be viewed on the Australian Parliament’s e-petitions website under reference EN7615.
Related: Succession planning and why founders over 55 need this conversation
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