Together with the Gauteng Partnership Fund (GPF), TUHF has set up the Intuthuko Equity Fund.
By contributing to the deposit or own equity requirements necessary for a loan approval, the fund assists previously disadvantaged South Africans (in certain occupations and income groups) who wish to enter the rental housing industry.
The Intuthuko Equity Fund targets caretakers, property managers, artisans in the construction industry, police, fire men and women and nurses, focusing mainly on those who live or work in the inner city.
How it works:
The IEF will match the entrepreneurs own cash to a maximum of
R200 000.
The contribution to the deposit is done by IEF as a “silent partner” who quietly supports the entrepreneur in the background.
This deposit allows the entrepreneur to raise a substantial loan from TUHF which is enough to purchase and refurbish a property.
In return, the IEF claims a 40% partnership in the “business”.
The IEF can however be “bought out” at anytime.
The TUHF loan can be repaid over a period of up to 15 years.
The fund will only finance a deal that makes business sense, one that earns enough money from the business, not only to repay TUHF’s loan with interest, but also to make a profit. This profit is then shared between the buyer and the Intuthuko Equity Fund in a way that supports him to grow his business.
The Intuthuko Equity Fund seeks individuals from the target group who are:
Mature and have business flair.
Prepared to contribute “earnest” money i.e. all their savings.
Hard working and problem solving.
Know the inner city and the neighbourhood in which they buy.
Determined to make a better life for themselves.
Proud to own a clean and well-run building.
Equity conditions:
Entrepreneurs should have identified the building they wish to purchase and have already approached the seller/owner.
The business must be viable and show ability to handle the TUHF debt burden as well as to give a return to the entrepreneur and his silent partner - the IEF.
The equity is given over a period of seven years.
After it has paid off the loan instalment and given a return to equity, the business must still have an active cash flow.
Entrepreneurs may approach TUHF directly for a loan application. These are also available online.
TUHF’s involvement in the deal stands as guarantee to the seller that the purchase price can be paid.
If necessary TUHF can even assist in negotiating a good purchase price.
Why go this route:
The IEF is a silent business partner to the entrepreneur.
The IEF is much more accommodating than the average business partner.
The IEF requires less return than the average business partner, which gives boost to a new business.
