A £30m fund is being established to support small third sector businesses as Scotland recovers from coronavirus.
The Scottish Government said the money will help charities and social enterprises access loans to boost growth and explore developing forms of social investment and finance.
The fund aims to tackle the impact the pandemic has had on the sector and bolster it during the recovery with the aim of making it more sustainable in the long-term.
Communities secretary Aileen Campbell said: “We have done all we can to support the third sector throughout the pandemic. This new fund will focus on those organisations with the potential to grow, contributing to jobs and making a positive contribution to our communities and the wellbeing economy.
“It also goes some way towards our commitment to explore other strands of social investment, including capital loans, to build upon Scotland’s world leading position in social enterprise.”
The Third Sector Growth Fund is made up of the £15m Social Catalyst fund, aimed at those who cannot access standard loans, the £10m Circular Economy Fund, to support activity that builds of the sustainability of social enterprises, and the £5m Social Impact Venture Portfolio, which will offer equity investments to encourage organisations to adopt a social enterprise model.
The Impact Investment Partnership Scotland (IIPS), an entity owned equally by Firstport and Social Enterprise Scotland (SES), will manage the Social Catalyst Fund.
Yvonne Greeves, board member at Firstport and chair of Catalyst Fund, said: “The Catalyst Fund is an exciting new addition to the social investment arena in Scotland. The patient, revenue-based repayment model is well placed to help certain social enterprises obtain the capital they need to start-up and grow, whilst offering them a more flexible repayment approach to match their ambitions.
“We welcome the support from the Scottish Government in backing this innovative model and we look forward to supporting social enterprises with potential for high-growth to enter new markets and deliver significant social impact.”
Access to the funds will be by application. Further details of the funds and how to apply will be published on the partner organisations websites later in the spring.