A new £30 million fund is being established to support small businesses within the third sector, helping them to grow as Scotland recovers from the impacts of coronavirus.
The fund will be designed to respond to a need for third sector organisations to access loans to help grow and explore new forms of social investment and finance. It will also help support the sector to meet the challenge of the pandemic and to become more sustainable in the long-term.
The Third Sector Growth Fund will have three elements:
The Social Catalyst fund, which totals £15 million, will help growing organisations which are not able to access finance through standard loans, offering investment which can be repaid based on turnover, rather than growing interest rates. This would suit small businesses and start-ups whose income is variable. Managed by Social Investment Scotland and Firstport.
The Circular Economy Fund will support activity which builds on sustainability of social enterprises and enables growth through investment loans. Together with The Long Term Third Sector Finance Fund which will offer loans for social enterprises and Third Sector organisations over a period of 18-24 months, a total of £10 million will be available. Managed by Social Investment Scotland.
The Social Impact Venture Portfolio will offer investments of equity into mission-driven businesses, encouraging organisations to adopt a social enterprise model. This is worth £5 million.
Further details of the funds and how to apply will be published on Social Investment Scotland and Firstport websites later this Spring.