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.

Communities secretary Aileen Campbell, said: “We have worked hard 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 fund will help this sector to ensure that it not only supports our communities, but is at the very forefront of our recovery, leading our communities and our country through recovery.”

Yvonne Greeves Board member at Firstport & Chair of Catalyst Fund, added: “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.”