"We are not committing to a transaction before Christmas but it is still possible," he said.

The government announced the two funds in November last year but is facing criticism over their slow progress.

I think the prospects of that getting off the ground are really, really low.

Joseph Healy

At the time of the funds' announcement small business ombudsman Kate Carnell said she expected the securitisation fund to be operational by mid-year.

Joseph Healy, co-founder and chief executive of small business challenger bank Judo Bank, said the securitisation fund was "a drop in the ocean".

"The symbolism is important because I think it shows that there is a public policy reaction to a market failure that absent some reaction, nothing will change," he said. "So I look more to the symbolism of those announcements than the substance of those announcements. It's a step in the right direction."

Mr Healy was sceptical about the government's proposed $100 million growth fund which is being established through an industry group led and chaired by National Australia Bank.

"I think the prospects of that getting off the ground are really, really low," he said. "Because there's no skills in the industry to do that in the banks, that is. There are skills in the marketplace, but not in the banks. Having seen the sort of people ... that are involved in it, it doesn't fill you with lots of confidence, about their ability to get that off the ground."

Mr Frydenberg defended the government's action on the growth fund.

"The government is making progress with a number of financial institutions in regard to the establishment of an Australian Business Growth Fund that would provide additional support to small businesses by looking to provide long-term passive capital," he said.

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Anthony Healy, chief customer officer, business and private banking at NAB, said the bank had the necessary skills to deliver the growth fund.

"Access to long-term equity capital is crucial for a thriving SME sector, which is why we’re working closely with the federal government to establish the Business Growth Fund," he said.

"Having operated successfully in the UK for several years, we know there are significant economic and employment benefits for Australia and discussions are progressing with several banks who have a great depth of skill and industry know-how to realise the opportunity".