Pandemic-hit small businesses in need of a short, sharp capital injection to get restarted may find it worth their while looking at a new fund designed specifically for that purpose.
Canberra not-for-profit venture debt specialist firm Epicorp has launched a $500,000 fund for small businesses in the Canberra region to help them get back on their feet and grow as the ACT economy recovers from the effects of the COVID-19 restrictions and lockdown.
The COVID Recovery Loans fund will provide individual loans ranging from $20,000 to $50,000 to Canberra region companies, with a repayment period of 12 to 15 months.
Unlike banks, Epicorp takes all the risk and does not require security, but charges interest rates ranging from 10 to 15 per cent.
Epicorp chairman Ken Kroeger said that for these loans, rates would be at the lower end of the scale.
Mr Kroeger said the loans were intended to be short-term solutions for businesses needing a quick rebound, with fast application turnarounds no greater than two weeks.
“This is really a short and sharp injection of cash to go back and restock their shelves for the first time or bring labour back to the business – the things companies need when they open their doors again,” he said.
There were no restrictions on the type of business that can apply, just an ability to pay it back within the 12 to 15-month term.
“We have this capital available and we’ve been lending it to businesses of all sorts and we figure this was probably a good time to look at smaller businesses – more traditional retail and services business that have been negatively affected by the pandemic,” Mr Kroeger said.
Supporting Epicorp with due diligence and customer selection is Canberra accounting firm Tailored Accounts, which proposed the fund after finding many of their clients in need of help.
Mr Kroeger said the banks were still risk-averse.
“Borrowing from a bank for a small business is almost impossible without putting your personal home or office up or some sort of asset as collateral,” he said.
Mr Koeger said if the fund proved popular there would likely be a second round matching the initial $500,000 on offer.
Epicorp was originally founded in 2001 to help establish a strong technology commercialisation process for the Australian Capital Region, and is owned by the ANU, University of Canberra and CSIRO.
Today, Epicorp works closely with the Canberra Innovation Network and the region’s innovation and business support network to provide companies with short-term growth capital through lending facilities and venture debt.
Since recapitalising in 2017, Epicorp has loaned about $3 million to about 20 companies, with funds ranging from $70,000 to $250,000, many of which have enabled firms to hire staff.
To learn more visit www.epicorp.biz.