The Catalyst Fund

Loan Details

What is the Catalyst Fund?

The Catalyst Fund is a different kind of social investment product that supports ambitious social enterprises to scale their business and their impact. Repayments are based on a percentage of your trading revenue, keeping it flexible and affordable for your organisation as it grows.

The fund is open all year round for social enterprises looking for social investment of over £50,000 to help them grow their business.  

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Who is the Catalyst Fund for?

The Catalyst Fund is for ambitious social enterprises in Scotland who need investment to grow their trading revenue and have the potential to deliver significant social impact – but are currently unable to secure existing social investment products.

There are many social investment products available for social enterprises. For example, you could look at whether Social Investment Scotland or Foundation Scotland might be right for you. You can also check the Good Finance website for other providers - Good Finance aims to support enterprising charities and social enterprises navigate the world of social investment.

However, many social investment products are unsuitable for early-stage or growing organisations due to fixed monthly repayments or requirements for security over assets. For example, a fixed repayment loan wouldn’t work for a start-up with significant development costs that may have uneven revenues in the early stages. This is where the Catalyst Fund’s innovative model might help, as the repayments are flexible and based on the revenue you earn from trading.

There is no one-size-fits-all investment model, and some social enterprises won’t be suitable for the Catalyst Fund.

Catalyst Fund investment can help social enterprises achieve financial sustainability OR reach a stage where they can go on to secure further growth investment.

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How does it work?

The Catalyst Fund offers a revenue-based repayment model. In practice, this means:

• The monthly amount you repay will be based on the trading revenue you have earned. On good months, you will pay back more; on months with low trading revenue, you will pay back less. This is calculated on trading income only, not grants or donations.
• There is no interest rate – instead, we charge a fixed fee. This means you will always know the total you will have to repay, and it will not increase, regardless of the period of your loan. The fee will be proportionate to the amount you borrow. In total, it will be similar to the amount of interest you would pay on a comparable interest-bearing loan.
• There is no fixed term on your loan. You will continue to repay the agreed percentage until you have repaid the total amount you borrowed and the fee. We aim to be repaid within ten years but will walk with you and support you for as long as it takes!

There are also no repayments for the first twelve months. A model like this gives your social enterprise the time and flexibility it needs to grow.

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Eligibility and Application

If Catalyst sounds like it might be a fit for your organisation, please check that you meet the eligibility criteria:

• Scotland-based: My enterprise is incorporated and headquartered in Scotland.
• Positive impact: My enterprise aims to provide direct social benefit to individuals, communities and/or the environment, and I can provide evidence of the impact the enterprise can make.
• Operational: My enterprise is up and running, and I can provide evidence of income generation that would support a loan application.
• Social enterprise: My enterprise has an appropriate social enterprise legal structure for the context and location in which it operates.
• Governance: My enterprise has at least three unrelated directors/ trustees.
• Prohibited activities: The activities of my enterprise do not involve political campaigning or the advancement of religion.
• Firstport funding: If my enterprise has received funding from Firstport before I have completed the required sign-off process.
• Considered other sources: I have considered other forms or investment providers to fund my enterprise but have been unable to secure funding due to my enterprise’s age, stage or business model.

To apply for the Catalyst Fund, first read the Guidance document, which has more information about the fund and the application process. Then, you can complete an Expression of Interest online by following this link.

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Not sure if the Catalyst Fund is right for you?

If you’re unsure if Catalyst is right for you or not yet confident about taking on repayable investment, please come to our fortnightly Social Investment Office Hours or speak to our Investment Readiness team. You could also consider Step Up, which provides smaller scale finance to do more of what’s working for your enterprise.

Finally, why not read about previous Catalyst Fund investees The Granton Project CIC and The Energy Training Academy to understand how they’re using their investment to scale their businesses and impact?

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Have a question?

Please read the guidance below or check our Frequently Asked Questions.
If our FAQs doesn’t answer your question, our Investment Team is introducing ‘Chat to our experts during Social Investment Office Hours’. Click here to book your session.

Or arrange a short call with Daisy, our Head of Group Investment Programmes, here.

Also, you can contact us via our Contact Us page or by phone at 0131 564 0331.