In a statement to market today, the bank said the new funding would be made available immediately to companies with fewer than 250 employees looking for loans of up to €12.5 million for a minimum of two years.

Today’s news is a timely boost for Santander that has already pledged to increase its lending to SMEs by 25 per cent this year.

Steve Pateman, head of corporate and commercial banking at Santander, said that ensuring businesses are able to access affordable investment capital is crucial for the UK’s economic recovery.

He added, ‘Thanks to our partnership with the EIB, we will be able to assist more small and medium-sized customers with their expansion plans at discounted rates, helping to create local jobs and fuel this recovery.

‘This new fund quickly follows our recent £100 million fund specifically aimed at the higher education sector, also in partnership with the EIB.’

Santander has lent £129 million through the EIB scheme, including financing Country Court Care Homes’ acquisition of Sheffield-based Abbey Grange Nursing Home after it was placed into administration.

Santander was also responsible for financing the expansion of Hampshire manufacturing firm St Clare Engineering Ltd with the acquisition of additional premises.

Simon Brooks, European Investment Bank vice president, said today’s announcement was part of a wider engagement to assist SMEs across the UK and elsewhere in Europe to continue to access investment finance during ‘economically challenging times’.

Last year 115,000 European SMEs qualified for EIB funding, and over the last three years €30 billion has been provided to SMEs across Europe by the bank.