A NEW fund for black start-up businesses, capitalised at R150m, has been launched as a joint venture between Khula Enterprise Finance and Business Partners.

Khula is the anchor investor in the fund, contributing R120m, with the balance from Business Partners, which will manage it.

Khula MD Xola Sithole, pictured, says the aim is to ensure new or potential entrepreneurs with well-devised business plans has access to financing.

“In reviewing the SME financing landscape, it became abundantly clear that access to finance for black economic empowerment start-ups remains a challenge. This product forms part of our response to that challenge.”

Khula and Business Partners hope to attract other partners to raise the total fund to R300m.

Business Partners MD Jo Schwenke says that qualifying applicants can receive R150000-R3m for their venture.

The fund exclusively targets black-owned (minimum black shareholding 51%) as well as black-managed and black- empowered (minimum 26% black shareholding) small and medium enterprises (SMEs).

Special focus is given to female entrepreneurs and the minimum target for the fund is to achieve a portfolio mix in which at least 33% of the SMEs funded are owned by women.

“A key element of this fund is that it is supported by a technical assistance programme,” says Sithole. "Starting with the application process and continuing throughout the repayment period, qualifying small and medium enterprises will be able to benefit from the added-value services made available through this programme.

“These include services such as accounting support, marketing and turnaround management.”

Each application will be individually assessed and, if the venture is found to be viable, a customised investment and added-value solution will then be developed for the business, taking into account whether the entrepreneur has capital or security to contribute or not.

The fund does not require applicants to have either capital or security, but should they have an own contribution to make, this will favourably influence the structure of the deal.