Founders First Capital Partners (FFCP) has announced the oversubscribed first close of its Change Catalyst Fund II (CCF II) at $12m (£8.9m).
The new fund will invest in growing service-based businesses that are typically generating $1m to $10m in revenue, with commercial and government customers and the potential to advance towards mid-market scale.
Read more: Varde fuels YouLend US expansion with up to $225m facility
Analysis by FFCP, an impact private credit platform, has found there are 1.5m such businesses across the US.
The new fund is deploying capital with particular emphasis on “regions of excellence”, including California, Illinois, Minnesota, Pennsylvania, New Jersey, New York and the Washington DC metro area, where FFCP has established strong borrower pipelines and community partnerships.
The firm said the launch comes at a “critical time” after changes to the US Small Business Administration in June 2025, prohibiting the use of SBA 7(a) and 504 loans to refinance merchant cash advance and factoring debt, which it said “eliminates a critical lifeline and leaves entrepreneurs with fewer responsible options than ever”.
CCF II, which is targeting $50m over the next one to two years, was designed to address the investing strategies of institutional investors, including financial institutions seeking Community Reinvestment Act alignment, as well as corporations, foundation endowments, family offices, fund of funds, and their investment advisors.
The fund provides fixed-interest promissory notes, three different risk-return options, and quarterly distributions, according to FFCP.
Read more: Fasanara Capital and IFC team up to finance emerging markets MSMEs
CCF II attracted institutional capital from new and existing investors, with Surdna Foundation, Deutsche Bank Americas Foundation, and Sunrise Banks among the anchor investors that participated in the fund’s first close. It also received backing from Reynders McVeigh Capital Management, which co-designed and helped launch FFCP’s $16m Change Catalyst Fund I.
“Reaching this first close of CCF II reflects years of deliberate work – building a strong track record with CCF I, refining our equity-like growth capital model, and deepening partnerships with investors who share our commitment to expanding economic mobility through small business growth,” said Kim Folsom, founder, chair and chief executive of Founders First Capital Partners.
“Over the past 10 years, we’ve translated this strategy into measurable impact – helping small businesses stabilise, grow, and create quality jobs and wealth in their communities,” Folsom added.
