Another £250m is being offered through the government's year-old business bank initiative, bringing the total available to £1.25bn.
The headquarters of the scheme is also being moved north to Sheffield, according to the Department for Business, Innovation and Skills.
John Allan, national chairman of the Federation of Small Businesses (FSB), said he welcomed the news, revealed during a small business visit by deputy PM Nick Clegg and business secretary Vince Cable.
"Our members will welcome this further commitment to the business bank, which has a key part to play in fostering competition and ensuring businesses get access to finance they need to grow," Allan said.
"The finance through the business bank needs to help very small and start-up businesses that we know find it hard to raise finance through the main high street banks."
Allan said that putting all these government-backed products under the control of the business bank will mean that small firms seeking financial help will know where to go for advice as well.
"Promoting alternative types of finance will give firms more choice than just traditional debt finance through the high street banks," he said.
The business bank's new permanent headquarters will be near the constituency of Clegg (pictured, right) – Sheffield Hallam. However, reports also said today that the European Commission has not yet approved the lending plans, meaning it could be some time before the initiative is in full swing.
The news is part of a week of focus by the government on what small companies need, including the Autumn Statement by George Osborne on Thursday, and ending this Saturday.
It is believed there will be changes to business rates – perhaps a freeze – and taxation announced this week in the Autumn Statement.
Highlander MD Steve Brown tells CRN about the skills he learned on the pitch and brought to the boardroom
Reports suggest Dell is pursuing a straightforward IPO, contradicting existing plans to buy out tracking stock holders
Analysts predict upturn in PC market next year, but 2018 to remain plagued by components shortages
Neil Sawyer claims he has 'never seen so many conversations about a new method of investing in workplace technology'