After months of negotiations, the banks have agreed to take part in a small business growth fund, with each tipping in $100 million.

The Morrison government will also contribute $100 million.

The fund will provide small and medium-sized businesses with so-called "patient capital", where investors don't expect to turn a quick profit.

"The whole idea is if you've got a business that you may want to grow, expand, to innovate, to buy new equipment, but you don't want to increase your debt profile," Treasurer Josh Frydenberg said on Wednesday.

"This fund offers the opportunity to get a capital injection from equity, to get an opportunity to partner with the growth fund, who will take a minority stake in your business."

The fund is expected to mature to $1 billion within five years and help between 30 and 50 businesses each year.

Shadow treasurer Jim Chalmers offered the plan in-principle support, but took a swipe at the government over the process.

"If the government was serious about getting this right they would have allowed more than four days of consultation on the draft legislation," Mr Chalmers said.

"The treasurer's engagement with relevant stakeholders and businesses so far has been totally inadequate."

Australian Associated Press