Firstport and Social Enterprise Scotland have launched a new fund to offer loans starting at £50,000 for ambitious social enterprises in Scotland.
The Catalyst Fund will use a revenue based repayment model, giving social enterprises the flexibility needed in the early stages of development to help fill gaps in the existing social investment network.
Most social investment products on the market are like bank loans, with social enterprises making fixed repayments over a specific period until they have repaid the loan amount, plus interest.
The Catalyst Fund repayments are based upon a percentage of the trading income earned by the enterprise, making it more flexible.
There is no specific length of term either, as revenue-based repayments continue until an agreed amount is repaid.
The fund has been made possible following a £15m investment from the Scottish Government, which will complement the existing social enterprise support and funding infrastructure.
Daisy Ford-Downes, head of group investment programmes at Firstport, said: “We have been listening to social entrepreneurs and reviewing the data, and we know that there is a gap in social investment for early-stage social enterprises.
"It is a missing stepping-stone in the path, and it is preventing too many from reaching their full potential.”
Chris Martin, chief executive at Social Enterprise Scotland, said: " The Catalyst Fund will help support ambitious social enterprises to accelerate their ambitions and deliver social and environmental impact at scale without needing to revise their business model to access traditional investment."
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