Ken Kroeger: Navigating the Business Landscape with Epicorp
In a recent interview with Ken Kroeger, the chairman and CEO of Epicorp, a not-for-profit business loaning agency, he shared insights into the organization's unique approach and journey. Epicorp, based in Canberra, Australia, stands out for its commitment to supporting small businesses without requiring traditional security for loans. Kroeger's interview provides a glimpse into the history of Epicorp, its mission, and the challenges and successes faced along the way.
Ken Kroeger begins by taking us back to 1998 when the Australian federal government aimed to harness the innovation seen in Silicon Valley. The government initiated the establishment of business incubators, leading to the birth of Epicorp. Initially injected with government funds, Epicorp evolved into an organization that provided mentoring and capital to early-stage companies. Over the years, the company went through transitions, ownership changes, and a period of dormancy.
Kroeger explains how he inherited Epicorp, a seemingly dormant business, around 2012 or 2013. The company had a modest $300,000 in the bank, and its activities were limited to an annual audit and minimal engagement. The turning point came in 2017 when funds from an IPO left Epicorp with around $5.5 million. Facing challenges in returning the money to the government, Kroeger proposed a unique plan to lend the funds to small businesses, leading to the birth of Epicorp's small business lending capability in 2019.
What sets Epicorp apart is its lending model, as Kroeger explains. Unlike traditional lenders, Epicorp does not require security for loans, taking on 99% of businesses that banks would typically reject. The due diligence process focuses on the company's ability to repay the loan within 24 months, and the loan amount ranges between $100,000 and $500,000.
Epicorp's Impact on Small Businesses
Kroeger recounts the positive impact Epicorp has had on small businesses. By offering free business consulting services and assisting companies in increasing their valuation, Epicorp aims to empower entrepreneurs. The organization's commitment to taking risks and providing a helping hand has resulted in over $7.5 million in loans to date.
In response to the challenges posed by the COVID-19 pandemic, Epicorp launched the Recovery Fund in 2021. However, Kroeger acknowledges that the demand was not as high as expected, and the program was relatively short-lived. Despite this, Epicorp made a difference by providing quick cash injections to local businesses struggling during the pandemic.
An unusual part of Epicorp, is that they don’t take any security for their loans.
“If they can’t pay it back, it’s my problem”
“The money came from the taxpayer originally. So if it get’s consumed through the process of trying to help companies, I don’t have a problem” Kroeger states.
The Canberra Advantage
Ken Kroeger expresses his belief in the advantages of being based in Canberra. He sees the city as a place where businesses can thrive, emphasizing the importance of reaching beyond local borders to build a successful enterprise. Kroeger credits Canberra's changing landscape and the federal government's outsourcing decisions for the growth of the business ecosystem in the region.
Through innovative lending models, commitment to mentorship, and a focus on risk-taking, Epicorp stands as a testament to Canberra's evolving business landscape. Kroeger's insights provide valuable lessons for aspiring entrepreneurs and underscore the importance of community support in fostering business growth.
