Small businesses struggling to access credit are to be given a welcome boost with £110 million of new funding, Vince Cable has announced.

The Business Secretary pledged £55 million of Government funding – through a scheme called the Business Finance Partnership – to peer to peer lenders and other finance suppliers.

Match-funding from the private sector is expected to bring in a minimum of £55 million, making at least £110 million available to lend to small businesses over the coming years.

Speaking at the Association of British Insurers’ Investment Conference Vince Cable said, “Small and medium sized businesses need access to a diverse range of finance options, including non-bank lending. These new forms of finance are still small in scale today but they should, over time, bring additional choice and greater competition to the lending market.”

"Today’s funding announcement is just the type of help that the new Business Bank will offer. The bank, which will be operational by 2014, is being designed to tackle these long-standing, structural gaps in the supply of finance for SMEs.”

The Business Secretary also announced that a network of 1,000 Business Finance Advisors is to be launched to help small businesses identify the best type of finance for their needs.

Photo:  Vince Cable