The local arm of global banking giant HSBC is hoping to exploit the collapse of Silicon Valley Bank and its stranglehold on the start-up sector, becoming the first major bank in Australia to offer a venture debt product.

Venture debt is a loan to high-growth venture-backed start-ups, which struggle with meeting the criteria for typical loans. Rather than an equity investment, venture debt allows entrepreneurs to raise capital without setting a valuation or diluting their ownership stake.