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Financing Redefined

We offer businesses a better way to get financing. No loans, locally funded, simple and fair. Through financing based on Profit & Loss sharing, we enable you to focus purely on your craft, leaving behind the worries of debt and repayments.

By truly being a partner, you can rest assured our success and your success are one and the same.

Financing Redefined

We offer businesses a better way to get financing. No loans, locally funded, simple and fair. Through financing based on Profit & Loss sharing, we enable you to focus purely on your craft, leaving behind the worries of debt and repayments.

By truly being a partner, you can rest assured our success and your success are one and the same.

Businesses

Access our Profit & Loss sharing Financing — designed to fuel growth, support local businesses, and build lasting partnerships.

  • ✓ Debt-free growth and profit
  • ✓ Efficient cash flow management
  • ✓ Flexible terms and agreement

Investors

Invest with Catafin to grow your wealth through meaningful investments, fostering local business success and sharing in the profits.

  • ✓ Real economy growth and impact
  • ✓ Performance based returns
  • ✓ Comprehensive & Clear framework

Lets look at a simplified example:

A business partners with Catafin and we agree to a 60/40 sharing of profits, where Catafin gets the business an investment of $200,000 for 2 years so the business can buy inventory. Catafin reaches out to investors to secure the $200,000 investment in this business. For this service Catafin receives a service fee of $4,000 shared between the business and investors 50/50.

In case of profit: At the end of the 2 years, the new inventory resulted in $300,000 in revenue, then total profit is $100,000 (revenue of $300,000 minus the $200,000 initial capital). The initial capital is returned from the revenue to investors and then the profit is shared according to the pre-agreed ratio of 60/40.
In our example +$60,000 of the profit goes to the business, +$40,000 profit goes to investors.

In case of loss: At the end of the 2 years, the new inventory resulted in $190,000 in revenue, then total loss is $10,000 (revenue of $190,000 minus the $200,000 initial capital). The initial capital is returned from the revenue to investors however revenue is less than the initial capital and so the loss is absorbed by investors.
In our example $0 of the loss goes to the business, -$10,000 loss goes to investors.

Compared to traditional financing there are significantly less risks for a business with this approach. The main risk with getting traditional financing is not being able to pay back the loan and having to give up parts/assets of the business to pay it back. This is not a concern with Profit & Loss sharing because it is a partnership not a loan, if the business makes no profit, the investors make no profit. Rather the business gets to focus on business and not worry about paying anyone back.

This burden of risk is shifted towards the investors which is the opposite of how a loan works. We have included an example of this in the first item in the FAQ “How does Profit & Loss sharing work?”.

From the business perspective our model can be easily compared to traditional loan based financing, but for investors there is no traditional equivalent (investors do not get to take part in giving out bank loans). Since it is not common in the western part of the world many investors are unfamiliar with Profit & Loss sharing agreements, but thanks to its intuitive nature it is simple to understand the concept.

Compared to equity investments (stock, funds) there are less risks for an investor since it is an investment for a specific activity rather than ownership and the risks that come with it. Compared to fixed income investments (bonds, notes, bills) there are more risks for an investor with this approach since the profit is based on % and not fixed in $ or known ahead of time. But because the agreement is based on profit % the investor may see a significantly higher return than anticipated and so, like any good investment, the higher risks are balanced by higher potential returns.

To summarize, the main risk as an investor is that profit is not guaranteed, so it is critical to choose profitable and trustworthy businesses and this is where we focus much of our effort at Catafin. Through cooperation, due diligence and transparency we provide investors with high quality businesses to invest in.

This is one of the pillars of our mission and at Catafin we believe there are many benefits to this approach. Below we will list a few key benefits.

1. Community investment leads to increased awareness and customers. The more potential investors we talk to about investing in each of our business partners, the more people will be aware of the businesses, their values, owners, staff, thus increasing the potential customers of those businesses. Through awareness and word of mouth the positive impact of this effect can become massive over time.

2. Ease in scaling the amount of financing available. By having community investors for each deal instead of just private investors from Catafin we can significantly increase the availability of financing. Think of it like everyone in a village pools money together instead of just a few members. As the village becomes a town, and the town becomes a city financing will only become easier to obtain, people will get comfortable with investing and in turn many more people will benefit.

3. Fundamental to making Profit & Loss sharing an established form of financing. As our mission is to redefine the financing landscape, it is critical that understanding and awareness of this model is widespread. The more business and community members we partner with, the more normal/established this mode of financing becomes.

Great! We like to partner with proactive people and are happy to discuss what you have in mind.
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